Bear flattening could well be the theme for 2016…

The bond market had a quieter day despite the $29bn 7yr auction. Average yield was awarded at 2.16% with a bid/cover ratio of 2.34 versus the usual average at 2.46. A tighter range was seen across the curve with 5s at the pivot of weakness. The 2yr note fell 2bp (0.21%) 5s were unchanged at 1.80% with further weakness for 10s and bonds (30s) both declining by 1bp (closing 2.30% and 3.04% respectively). Bear flattening could well be the theme for 2016…

Gold saw some renewed selling into year-end, lost $9, and was last seen at $1059 (-0.80%). Silver also traded heavy (down 0.7%) at $13.83. A closing for gold tomorrow BELOW 1044 will warn this may get very ugly next year. Silver is much weaker and a simple closing beneath 14.75 will also warn that new lows are likely in 2016.

USD / Yuan - we have elected ALL FOUR of the Monthly Bullish Reversals, confirming the change in trend

China Shuts Down FOREX at Foreign Banks to Try to Stop Dollar Rise

Posted on December 30, 2015 by Martin Armstrong

China has suspended FOREX business at three main foreign banks for the first quarter of 2016 in an effort to curb the outflow of capital into the rising dollar. This is an interesting attempt to curb the rise in the dollar and it is clearly showing the overall trend in motion.



It is interesting that China has taken this approach for we have elected ALL FOUR of the Monthly Bullish Reversals from the January 1, 2014, low in the dollar, confirming the change in trend. We still recommend that China just float its currency, for the West will blame it for manipulation when, in fact, the global trend is toward a strong dollar into 2017.

Markets trade on ANTICIPATION — not on fact.

Fundamentalists & their Formulas

Posted on December 30, 2015 by Martin Armstrong

QUESTION: Marty, I believe that the traditional way of looking at even value no longer applies. Take the claimed doctrine in finance named the dividend discount model. They assume that the price of a common stock is the present value of its future cash flows discounted by the rate of interest. What happens when interest rates are manipulated to negative? Does any theory or model make any sense any more?

ANSWER: No. The value of a stock isABSOLUTELY in no way determined by such a formula. That is up there with the random walk. It has no relationship to market trends whatsoever because markets trade on ANTICIPATION — not on fact.

The dot.com bubble is one example. They treated the auto stocks the same during the late 1920s. The South Sea bubble and the Mississippi bubble were the same, as was the Russia Bubble which burst in 1998 and resulted in the collapse of Long-Term Management. The book written on that one was entitled, “When Genius Failed”. These are made up by fundamentalists who waste their time looking for some magic formula that does not exist because it is far more dynamic than they can possibly imagine

The Dow for Year-End — Will it All Just Go Nuts for 2017?

Posted on December 29, 2015 by Martin Armstrong

The Dow Jones Industrials still remains in a bullish posture on a broader perspective. The real critical support will lie at 16500 and the Panic Support is well below the market at 13100. Panic Support is the level, if breached intraday, where a Panic Crash unfolds. That is the real important level for 2016, but it does not appear to be in the cards. Otherwise, a closing for 2015 above 16500 is still moderately bullish, whereas the technical levels will be 17345 and 18879.

We will be issuing the World Share Market Review after the first of the year. This will cover North & South America, Europe, Middle East, and AustralAsia, as well as Asia from India and China up to Japan. We will also discuss the prospect for a continued sideways market for 2016 with the potential for the Phase Transition unfolding 2017-2020.

Keep in mind that the bail-in becomes a formal European position on January 1, 2016, and 2017 is when G20 begins swapping info on everyone everywhere. Capital will be herded and the smart money will begin to position itself once it realizes that it is time to get off the grid. We have the presidential elections in the USA at year-end, and this too will help keep the markets guessing. Will we see Trump vs. Hillary? Will the Republicans split entirely as they desperately try to force their own pick as the Republican candidate in a dictatorial move as they have done before?

Yet, 2017 will see elections in Europe in France and Germany. Of course, we will also have the British vote to leave the EU. So looking at this agenda of fundamental chaos, it is not that hard to see why the computer is showing it all going nuts starting in 2017. The question we will address is shall 2017 be a REACTION LOW with the false move before the breakout or a high with the meltdown afterwards?

Stock Market v Currency Inflation

Posted on December 27, 2015 by Martin Armstrong

QUESTION:

Hello Marty

Great conference!

If the EM Debt implodes wouldnt the stock markets of those counties rise??

If the stocks from the EM markets did rise would they rise faster than the decline in their currency to the USD??

Thanks

CW

ANSWER: Yes. Normally we experience “currency inflation which is the rise in assets in proportion to the decline in the currency. If we look at the DAX on a yearly basis from the US Dollar perspective, you begin to see the impact of currency. Most people think that the DAX has outperformed everything, but that is purely in nominal terms for the DAX has risen in proportion nearly to the decline in the Euro.

The “international value” perspective of the DAX clearly shows that the major high was in 2000 with the Euro peak against the dollar. We see a major crash into 2003 and foreign investors fled Europe. As the Euro Crisis materialized, capital migrated to Germany from all over Europe as the hedge against the collapse of the Euro.

The DAX is rising because of the currency primarily, not because of a rosy future outlook for the European economy as a whole.

We will be issuing a worldwide Stock Market forecast after we get the year-end closings. We will also issue the forecast for currencies and the prospects for the dollar after the New Year. Conference Attendee get these reports as part of the seat price.

Posted in Uncategorized

Britain - real estate

The Only Hope to Save Britain?

Posted on December 28, 2015 by Martin Armstrong

Landlords are joining together to challenge the Conservative’s (Tory) tax hike filing a suit in the high court against their tax increase on “buy-to-let” investment properties. One of the reason I have stated that Maggie Thatcher herself would have by now broke with the Conservatives and started her own third party is demonstrated by this abusive tax on property investment. The Conservatives are acting more like communists in London these days for this tax then Government introduced plans to prevent landlords offsetting mortgage interest costs against rental profits before calculating tax. So in other words, they are preventing the leverage in real estate which means this can only create a one-sided complete collapse.

David Cameron is perhaps the WORST Conservative in British History. He is doing everything possible to remain in league with Brussels. Cameron’s comment after rigging the Scottish vote to ensure Scotland could not leave the UK was shocking. He said the vote settled the question for “for a generation” revealing his pro-government posture and anti-Democratic undertone. This posture goes all the way to agree with Brussels, and Cameron’s arrogance (video of his speech) was just stunning. His promise for a referendum to leave the EU was a bullshit ploy he never expected would actually stand a chance to win. Now he is scared to death and has the bankers trying to frighten everyone if the in fact left the EU which is insane since the bankers themselves will fall if they remain inside the EU with what is on the horizon. EVERYTHING Maggie Warned about has come true under her own party. Thatcher was always clear that a single currency was all about the federalization of Europe through the back door. Cameron should what the debate back in 1990 on this issue,

These tax changes supported by Cameron on property in London demonstrate he is no Conservative. The “buy-to-let” tax on property eliminates interest expenditures in the property business unlike all other businesses, this is retroactive not limited in its application applying to future sales but to ALL existing investment properties as well as. This demonstrates how Cameron is not qualified to head any economy for he is creating the S&L Crisis for Britain. As soon as you create a one-sided market, prices implode. He is creating a situation where there will be NO BID for such properties.

We will see Britain facing a tremendous political upheaval as we approach 2017. We have warned that a year-end closing for the pound below 147 will warn the currency is preparing to crash. We have additional year-end sell signals at 146.15 and 140.50. The ONLY POSSIBLE HOPE TO SAVE BRITAIN will be Nigel Farage. Both Labour and Conservatives have simply lost their minds.

Year end prices -oil, gold, euro

CLARIFICATION

Posted on December 24, 2015 by Martin Armstrong

First of all. someone is claiming I put out some recommendation on DUST. I have NEVER recommended such an ETF and this appears to be a deliberate attempt to mislead people. You can search this blog, but I have never made any recommendation involving any specific ETF. The motive behind this scam is curious to say the least.

Secondly, a closing ABOVE $35.15 for year end in oil will signal that we may not see oil collapse and that it is entirely possible that the cycle of war will kick-in going into 2017.

Additionally, a closing for gold on the nearest futures ABOVE 1044.50 will also warn that it may not be as weak at first glance given it did bottom on the first Benchmark.

A simple year-end closing below 116.40 in the Euro for year-end confirms a broader correction is in motion with the earliest potential low in 2018 with the potential to extend into 2021.

There is some very interesting posturing going on in the world markets at this time. We cannot rule out that the entire trend BEGINS to go nuts in 2017 rather than concludes at that time frame. This we are looking at more treading water moving sideways into 2017 and then everything goes nuts with major political changes, then we are looking at a much more disruptive pattern that will blow the roofs of all the temples of politics. That means we simply go nuts starting in 2017 and extending into 2021.

The closing of 2015 in so many markets will set the tone for what is about to unfold. Either way, we are looking at a major change in trend for government is losing control of the economy.

World War III is over energy ??? Oil will be VERY CRITICAL as a signal for 2016

Evil People in High Places? Or Just Coincidence?

Posted on December 24, 2015 by Martin Armstrong

Dick Cheney is best known for being the head ofHalliburton who then became Vice President who moved his office directly in the White House and ran the government as the former “shadow president” because Bush, Jr. couldn’t even figure out he was holding a book upside down. Cheney started the Iraq War and then made sure Halliburton ran the show. When Congress was going to investigate the conflict of interest, Halliburton resigned its American citizenship and moved to Dubai to end any investigation.

Howard S. Jonas (b 1956) graduated from Harvard in  1978. He understands the game and is founder of the Newark, New Jersey-based oil and gas group Genie Oil & Gaswhich owns leaseholds both in the USA and Israel for shale oil deposits. He is estimated to sit atop 10 billion barrels of oil equivalent in the U.S. and 40 billion barrels in Israel. Added together, these shale oil reserves actually make Saudi Arabia’s proven reserves.look minuscule.

Jonas has brought in to his Strategic Advisory Board to secure influence Dick Cheney former “shadow president” of the USA, James Woolsey a neo-con former CIA Director under Bill Clinton, Bill Richardson is a former US Secretary of Energy, Jacob Lord Rothschild who is also a major investor in energy, Rupert Murdock who also is a major financier of the neo-conservative Weekly Standard of Bill Kristol, Larry Summers, who was US Treasury Secretary and helped Rubin draft the laws that deregulated US banks overturning Glass-Steagall, and Michael Steinhardt who is a major hedge fund manager and a serious philanthropic friend of Israel. Genie Energy was granted in 2013 the exclusive oil and gas exploration rights to a 153-square mile radius in the southern part of the Golan Heights by the Netanyahu government. The players are all in the game of a company most people have never heard of no less from Newark, New Jersey.

Genie Energy, confirmed that it has discovered oil and gas in this occupied territory held by Israel on the Golan Heights, which is formally the territory of guess who – Syria. So while the pipeline issue we reported was the real reason behind Obama wanting to invade Syria, we now have to also add to this mix Israel. Genie Energy needed a very influential Strategic Advisory Board because this is occupied territory belonging to Syria. The announcement of the discovery took place October 11th, 2015. We also have Russia starting to bomb US trained forces intending to overthrow Syria. This was the announcement of Genie.

“Preliminary evidence from the exploratory wells drilled by its Afek subsidiary in Northern Israel confirms the existence of significant quantities of oil and gas within its exploratory license area,” Genie said in a statement, but added that it does not yet have sufficient evidence to determine whether this or any part of the resource can be “technically or economically produced.”

This entire cauldron in the Middle East is shaping up to be World War III but it is over energy. It all began right to the day of the Economic Confidence Model on September 30th, 2015. The public announcement of Genie was October 11th. That means the results were already known Behind the Curtain going into September 30th. These people need a war in their mind to get oil prices back up. If oil closes in the States above $35, then we are NOT getting that long-term bear market signal. We need a closing BELOW $32.20 to negate a bull market. A closing for 2015 ABOVE $35 will warn something is afoot. 

This is not a Christmas message I cared to write. Oil will be VERY CRITICAL as a signal for 2016 because we also have the War Cycle which turned up in 2014 and is now moving sharply higher into 2017.

Disease Is Cyclical — They Want to Claim It Is Global Warming to Raise Your Taxes

Posted on December 24, 2015 by Martin Armstrong

QUESTION: Mr. Armstrong, it appears that even dengue fever comes and goes according to your 51.6 year frequency. Does this 8.6 year cycle appear just in everything around us?

ANSWER: It certainly appears to be so. The dengue fever outbreak in 2015 appears to be on a cyclical schedule. Dengue is one of 17 illnesses listed as “neglected tropical diseases” by the World Health Organization. Dengue infects almost 400 million people annually, but this typically occurs in the tropics so it rarely makes headlines in the USA. For this reason, it is also neglected because drug companies can’t make money from the poor without insurance in such areas.

Of course, we have the people who are already using this to claim this is the result of climate change. Why not blame viral evolution on climate change as well. Climate change will be blamed for everything to justify the crushing degree of taxes that are coming by 2017. Behind the curtain, the IMF is telling the USA that it must raise taxes to 50% to match Europe, instead of saying that Europe should lower taxes to match the USA.

International travel is ignored. I myself was infected by a tropical parasite in prison because they brought in people from around the world. I had to see a specialist for most doctors said that doesn’t happen here. The specialist was able to recognize it in the same blood test that other doctors overlooked. Fortunately, it was gone after taking a drug for three weeks.

Dengue fever is a mosquito-borne illness also known as “breakbone fever” because of the debilitating joint pain it causes. It is not new history. So far, at least 157 people on the Big Island have been diagnosed with dengue, which causes fever, rash, intense headaches, severe muscle aches, and serious joint pain, according to the Hawaii state health department.

All diseases are cyclical in nature. This is Hawaii’s largest outbreak of dengue in about 52 years. With air travel as it is today, it will begin to spread to the continental USA next year. It can be very painful, but it is not typically a fatal disease. Dengue doesn’t spread from person to person like the flu. Mosquitoes pick up the virus when they bite infected people. Then they fly off and spread the disease when they bite someone new.

Mexico approved the world’s first vaccine against dengue. The cycle does not end with dengue fever. Two other mosquito-borne diseases are now also spreading very fast in the Western Hemisphere known as the Chikungunya virus, which first arrived in the Americas in 2013, and Zika virus, which was first diagnosed in Brazil in May. Both have symptoms similar to those of dengue.

The Brazilian Zika virus has spread to other regions, not because of climate change, but due to travel that increased thanks to the World Cup in addition to migrations and international travel. When Europeans first landed in America, they brought new diseases that killed many natives. Traders initially returned to Europe with maize, potatoes, and tomatoes from the New World, which became very important crops in Europe by the 18th century. It is argued that a Columbus’ crew introduced Syphilis to Europe. So disease has long traveled around the world with trade without global warming or climate change.

Dengue, in particular, was very widespread in the U.S. until the middle of the 20th century. As a kid, I remember the trucks that would spray white clouds to kill the mosquito population in New Jersey. Mosquito control efforts beat the disease back then in most of the continental USA. Dengue fever was never eliminated in Puerto Rico, the U.S. Virgin Islands, or the Texas-Mexico border.

Dengue outbreaks are cyclical and previously hit Hawaii in 2001 and 2011. The virus also caused outbreaks in the Florida Keys in 2009-2011 and in Texas back in 2005 in the Brownsville region. The current dengue outbreak in Hawaii is the largest in about 52 years from the data. So, disease does follow a cyclical path that builds in intensity.

So if this is global warming, why raise our taxes? Just outlaw coal used to produce energy. Raising our taxes will increase the pockets of politicians but it will not reduce coal consumption.

GBP - A simple year-end closing beneath 15485 will signal that the pound is starting its decent.

Cameron Selling out Britain? Pound to Fall to 55 cents?

Posted on December 23, 2015 by Martin Armstrong

 

There is little doubt that David Cameron offered a referendum on Britain exiting the European Union (EU) because he thought it would never win. Now that the polls are in favor of exiting the EU, thank God Maggie is not around to watch what her Conservative Party is doing these days. Politicians have always been cross-dressers. Abe Lincoln, the first Republican president, defended the blacks against slavery while the Democrats supported the southern slave owners. It was the Republican Teddy Roosevelt who embraced Marx and even started the Progressive Party. Today, you have to scratch your head to figure out who is on whose side.
The latest is David Cameron crying behind the curtain that he really didn’t mean it. He is begging Brussels to come up with something or else he will lose and Britain will vote to exit the EU. The political leaders of the EU have now agreed that there must be a compromise to keep Britain inside the EU. After all, Cameron agreed to chip in £1.7 billion pounds to help the EU quietly so the British also received nothing from the EU but tax increases upon their own people. Then there was the design to end short selling, which Britain lost a court battle over. This will ensure that London will self-destruct as a financial center in the world. Of course, raising taxes on foreigners buying property in London was sure madness and placated the French. If anything showed that Cameron was anything but a Conservative, that did it. The ripple effect throughout London will cause a contraction as foreigners leave town and restaurants begin to miss clients spending wads of cash as will shops and trophy car dealers.




Brussels is now trying to come up with something for Cameron to screw his own people to keep Brussels in power. Those now in charge in Brussels realize they have to help Cameron sell bullshit to the British people or they will lose Britain.

A simple year-end closing beneath 15485 will signal that the pound is starting its decent. Our Yearly Bearish Reversal lies at 14615. With Friday’s closing at 14908. We can see that the market is warning us that Cameron may indeed destroy his own country. Even our technical models are highlighting 13965 as critical. The projection for 2017 at the extreme is 55 cents. That is really amazing.

You can see that if Britain stays inside the EU and surrenders financial integrity of London, there will not be much left. You might as well hand it over to Jeremy Corbyn and he can put his maximum wage limit in and that would probably make 55 look very reasonable. London property has already peaked; the Conservatives followed the lead of the French and have started to chase out all the foreigners. London properties crashed almost 12% in the first month from the downturn in the Economic Confidence Model on September 30.

Depression currency - Wörgl Experiment in Austria

Alternative Currencies of the Great Depression

Posted on December 22, 2015 by Martin Armstrong

QUESTION: Mr. Armstrong, have you ever heard of a short lived Wörgl Experiment in Austria? It was shut down by the Austrian Central Bank they say because it was successful. Have you looked into this experiment they claim defied deflation and inflation?




ANSWER: Yes. This was by no means an isolated instance. True, it was touted as the “Miracle of Wörgl” during the Great Depression. A very similar “experiment” took place in the United States when over 200 cities issued their own currency. You have to understand the dynamics of the period. This was the very age of AUSTERITY where the assumption was that the collapse was due to a lack of confidence in government so they increased tax collection and cut spending, which unleashed both deflation and a dwindling money supply. This led many cities to create their own money due to the lack of money in circulation that was impacted by hoarding.

The Wörgl Experiment began on July 31, 1932, the very month that the Dow Jones bottomed. The experiment involved issuing “Certified Compensation Bills” that were was a form of local currency known as Scrip or Freigeld. The monetary theories of the economist Silvio Gesell were applied by the town’s then mayor, Michael Unterguggenberger. What differed with Gesell’s idea was that the currency would expire. Believe it or not, there are some government’s looking into currency that expires. Since World War II, Europe has issued currency that expired roughly every 10 years. This forced people to bring out the old currency to be swapped and thus prevented hoarding.
The central part of Gesell’s idea was how to stop the HOARDING of money. This is why FDR confiscated gold. He too saw the problem of people hoarding money and not spending it. This is part of every economic decline. If there is no CONFIDENCE in the future, people save more. This is simply human.

 

Nevertheless, the Wörgl Experiment resulted in a growth in employment largely because they had to use the money. This allowed the local government projects to all be completed, which many called a miracle, for it appeared to defy the depression in the rest of the country. Inflation and deflation are also reputed to have been non-existent for the duration of the experiment. But this was simply the result of money expiring so there was no purpose in hoarding “money” or shifting it back to “asset” appreciation as in a hyperinflation.
Despite the appearance of success, the Wörgl Experiment was terminated by the Austrian National Bank on September 1, 1933.

Health Care Reaching its 51.6 Year Peak in 2017

 

Posted on December 22, 2015 by Martin Armstrong

 

COMMENT: You have discussed the growing threat of antibiotic resistance several times.  Sadly, I must confess, I am, in part, responsible for this trend.
I am a practicing physician. Last year, I had a lawsuit filed against me for NOT prescribing antibiotics. Since then, I prescribe antibiotics more frequently than ever.  My punishment, for attempting to be a good steward of antibiotic use, has been devastating.
I see the massive increase in costs of healthcare, as well as our nation’s over-regulation and bloated catalog of laws, as (directly and indirectly) caused by excessive litigation.  (In medicine, we sometimes refer to  malpractice suits “the hillbilly lottery,” because of the near randomness of any tort action to actual poor practice.)
In Niall Ferguson’s book, The Great Degeneration, he identifies rampant litigation and the explosion in lawsuits as one of the critical causes of the coming collapse of our society.
Do your data confirm this?   (Mine do.)
Thanks
Anonymous

REPLY: This is part of my argument that lawyers should not dominate politics. The first Congress had 91 members in total and 34 (about 37%) were lawyers. In the 112^th Congress (2011–2012) there were 539 members in total, out of which there were 208 career politicians and 200 lawyers who accounted for about 75% of Congress. These people have NEVER been on our side of the fence. In the current Congress, 160 of the House of Representatives’ 435 seats and 53 of the Senate’s 100 seats, both which amount to almost 40%, are lawyers which is up slightly from the 112th Congress.
There is ABSOLUTELY zero hope of getting real health care reform for the driving cost is lawyers suing doctors. As long as bureaucrats and lawyers control Congress, we are screwed. Then there are hospitals that are engaging in outright fraud. Ask to see an itemized bill and you will typically see $30 for an aspirin. Now the latest scam is to cover you only within a network. That means if you were on vacation in the States and needed medical attention, guess what – your insurance company may refuse to pay anything!
Obamacare has been a windfall profit binge for hospitals and insurance companies at the expense of the people. One personal friend signed up for Obamacare and when she went to the doctor she was treated like scum and told that she had one of those “charity” insurances, yet she paid $300+ per month.
On average, medical insurance under Obamacare rose nationally by 7.5% in a year. Oklahoma had the largest increase in cost for Obamacare among the 37 states when the benchmark plan’s premium rose by an average of 36%. Other states with premium increases of more than 25% were Alaska, Montana, and New Mexico. This is becoming totally insane. Yet Democrats cheer it and MSNBC demonizes anyone who dares to criticize the plan.



The excessive rise in healthcare costs has been supported by lawyers and hospitals — not private doctors who are being driven into groups to survive and are herded like cattle by lawyers. Looking at healthcare costs as a percent of total GDP, this single industry has grown in cost far out of proportion to everything else but education. What do the two have in common? Both are subsidized so they have no natural check and balance.
Guess what? We reach 51.6 years on this cycle in 2017. The entire system will start to collapse. Once upon a time, you had a personal physician. Now you have government and lawyers milking that relationship by sucking every penny they can out of you until you have no viable livelihood left. Taxes and healthcare take more than 75% of the middle-class income and the solution is to raise taxes on the rich, of course. Only when people cannot afford to pay these outrageous healthcare costs, that rise even in deflation, will the cost of healthcare collapse and come crashing down like any market.
Obamacare originally sought to criminally prosecute anyone who did not have health insurance, which illustrates how nuts things have become. The Republicans, at least, forced the Democrats to remove that one and replaced it with a fine. Can you image being thrown into a prison cell with a child molester for not being able to pay for health insurance? Had the Democrats been met with no opposition, you would spend time in prison today if you became sick and could not afford to pay health insurance. And these people are on our side?

Dow - 2017

Keep the Powder Dry Going into Year-End

 

Posted on December 22, 2015 by Martin Armstrong

This is historically a thin period of trading. Things can be a bit more volatile for a lot of the big money parks and parties at this time of the year. The Dow has not broken to the downside of the upside, as it is BASING within the trading channel. Wait for DEFINITIVE trades to emerge. This year-end is very important for it will help to determine if we are entering a blast off into 2017 or if we need to wait for the world to say “OH SHIT!” and it’s off to the funny farm into 2020.





We can see that the volatility models favor everything going nuts from 2017 onward. That will be the political year from hell as well. We also have the conclusion of this 2016 presidential race. If the Republican Party elites do not rig the primary or have Trump assassinated remotely using drones or hijack his car to run into a tree or off a cliff, then next year will be very interesting between Trump and Hillary — the Queen of banking Corruption. (see latest one on one attacks)





We can see from the daily array that the 16 was a turning point that produced the high close. We backed off but held the channel and bearish reversals, and now we have a choppy period with directional changes. So hold on. Keep the powder dry.

The Move to America – the Great Capital Migration

Posted on December 21, 2015 by Martin Armstrong

There is something very interesting unfolding. Part of the new year-end spending bill included a waiver of the Foreign Investment in Real Property Tax Act (FIRPTA) which had been implemented during the late 1980s when the Japanese were buying everything. They claimed to have focused on buying U.S. farmland, but it also applied to buying of trophy U.S. property like Rockefeller Center in New York City.

This position has been reversed in the new year-end spending package. While some attribute this to a grand conspiracy giving far more credit to those in Congress and in the White House than they deserve, our sources simply tell the plain story of lobbying to allow foreign buyers who are supporting the real estate market in key areas. Especially after London basically kicked everyone out of town who were foreign telling them their money was not welcomed, with lightening speed they instantly turned to New York City.

High properties even in Florida are being sold to the Chinese largely in cash deals whereas Canadians are buying the greatest number of properties. The lobbying has been from the real estate and banking industry who see a market they want to service. Slipping this into the $1.1 trillion spending measure that was passed to avoid a government shut down, included tax breaks for Americans and simultaneously treats foreign pension funds the same as Americans. There has been lobbying also from foreign pension funds because they see no hope in Europe and have been pleading to be allowed to enter the US market in a big way. For the first time this provision waives the tax imposed on foreign investors under FIRPTA.