Former French Colony of Mali Targeted

Posted on November 20, 2015 by Martin Armstrong

Mali, a former French colony, has been targeted as the war on France emerges. Mali came under French colonial rule in 1892. In 1893, the French appointed a civilian governor of the territory they called Soudan Français (French Sudan). Finally, by 1905 the French controlled the region. In 1958, the region was renamed Sudanese Republic, which then obtained complete internal autonomy, yet it became part of the French community or old empire. Then the next year saw the Sudanese Republic and Senegal form the Federation of Mali, and by 1960, France agreed to their full independence. So we still have a French target in this incident.

The targets of ISIS are France, Russia, and the USA. They are clearly attempting to create a war against non-Islamic countries in what appears to engage the entire war with religion at the center.

Sovereign Debt Crisis - Capital moves to the private sector, not to confuse this with rising stocks in a speculative boom.

How Stocks Rise in an Economic Decline

Posted on November 19, 2015 by Martin Armstrong

QUESTION: Marty,

Japan is in another recession but the Nikkei continues to go up!!

I assume this is mainly because of the carry trade??

Your thought, please.

Regards,

RC

 ANSWER: This is the New Age of Economics. When you enter a Sovereign Debt Crisis, people lose confidence in government. When that takes place, capital moves to the private sector. Stocks will rise as a hedge against government in such situations. Do not confuse this with rising stocks in a speculative boom. This is the phase of trying to get off the grid. Things act differently then. There is a different outcome than hyperinflation, which has taken place in a peripheral economy but never in a main economy from purely economics.

I have explained before, the collapse of Rome was NOT due to hyperinflation. It was FIRST due to the collapse in confidence when Valerian I was captured by the Persians, turned into a slave, and stuffed when he died as a trophy. When people no longer trust the state, the monetary system collapses. It is never HYPERINFLATION first — it’s the result of the collapse in confidence. That is what the goldbugs never get and it is why they lose so much money waiting for inflation to appear first. They simply do not understand how the real world functions, no less the monetary system. They hang their entire thesis on the German hyperinflation without understanding that it was a communist revolution that disavowed the national debt of the previous government by wiping out banks and savings as they invited the Russian communists to take Germany. If you had any tangible wealth, you hoarded it; you certainly did not have money on deposit in banks.

In the case of Japan, each emperor issued new coins and devalued the outstanding money supply to 10% of his new coinage. Eventually, people simply refused to accept Japanese coins, and as a result, bags of rice became money and Japanese emperors LOST the confidence of the people and could no longer issue coins for 600 years.

Origin of Dollar Sign

Posted on November 19, 2015 by Martin Armstrong

Apparently, there is some new conspiracy theory running around that claims that the dollar sign ($) is some sort of symbol for a secret banking cartel because “S” is not found in the word “dollar”. Sorry, it seems that these people are desperate to create some support for whatever it is they are trying to say. First of all, the word “dollar” comes from the German “thaler” because there was such resentment toward England that the colonists refused to use the word “pound” for money.

The British needed money badly, so they demanded any payment from the colonists was to be in silver and gold, but any payment to America was to be in copper. This resulted in AMERICA being starved of money to the point that they issued paper money. The standard coin used in America was the Spanish 8 reals, which became the dollar. A piece of eight was cutting this up like a pie. One eighth of a dollar or one silver real was one “bit”, so 2 bits was 25 cents, 4 bits was half a dollar, and 8 bits equaled a dollar.

Therefore, the dollar sign “$” came from the Spanish 8 reals, not from some secret banking cartel destined to rule the world. There is no secret hidden image of meaning behind the symbol. It was merely taken from the Spanish coins that were in circulation throughout the American colonies since the British needed money and extracted everything from America, just as governments are doing again today.

Silver history in US

Are Goldbugs Howling at the Moon with $100,000 Prices?

Posted on November 19, 2015 by Martin Armstrong

COMMENT: Marty, the goldbugs are like jihadists, they are now proclaiming China will buy all gold and make it $50,000 to $100,000 an ounce. When wrong, just raise the targets to even more insane levels. They really hate your guts and the closer gold comes to making new lows the personal attacks on you escalate. It is clear that they are deranged and think if they can slander you they will save gold. They also said your “big money” can park in gold if it is $50,000 to $100,000 and ounce. That would be fiat if government dictated such a price. They are out of their minds with this obsession.

This is becoming a pathetic display of insanity like getting 73 virgins if you sacrifice your savings. They are claiming you have been wrong on the stock market that it is flat and that proves you are wrong on gold. I suppose they missed the call where you said it would peak in May, drop into August and base this year below 18500. They twist and lie about everything. I am coming to the conclusion they are just lunatics who bark at the Moon for they are no financial analyst and certainly do not understand the economy.

Keep up the good work

REPLY: Well, the computer did a good job forecasting the U.S. share market. The goldbugs can howl at the moon all they want, but the markets are never wrong. The computer nailed the May high, called for a waterfall crash, and then picked the low. The facts are the facts, yet they are desperate to say otherwise in hopes of saving gold. The markets dictate the outcome — not their rantings.

Gold is a hedge against government and it will rally when the timing is right. We have stated that will be right and gave the benchmark dates. This is all about them being wrong, and like Marx, trying to deny that there is a business cycle.

From the global view, you can see why they have been wrong. They only look at the world in dollars. When we look at the Dow, the peak was 2000 in euros. That year produced the highest close. The 2007 rally in the U.S. share market was NOT the major high in terms of currencies. The 2009 low was the major low. In terms of currencies, we have only six years up. This warns that the Dow will rise further globally, meaning the dollar will move higher.

In terms of dollars, both the Dax (Germany) and CAC40 (France) share indexes reflect the same situation of the major high being 2000, not 2007 or currently. 

Looking at the British FTSE reveals a flat top, which suggests that this will breakout to new highs. This is likely going to be capital shifting inside Europe to the pound to abandon the euro.

It is nonsense to think that gold will go up to $50,000 to $100,000 or that China will back its currency with gold at such levels. The world abandoned silver after the Prussian War. The silver miners convinced U.S. politicians to buy their silver and force the world to accept whatever ratio they dictated. Well, they bankrupted the USA because the silver/gold ratio that they fixed at 16:1 was 30:1 outside of the USA. That did not end very nicely, yet they think arbitrarily raising the price of gold to $100,000 will solve the problem. China has absolutely ZERO intention of such insanity.

They can rant against me all they want, but it will not make them right. Gold will not rally before its time. We have given the targets at the conference. The manipulators have it easy. Just rally gold $50 and they run out and buy more. Then it is taken back down and they do it again in three months. I seriously question why they are praised for cheer-leading every rally.

Fusion

Clarification on Energy

Posted on November 17, 2015 by Martin Armstrong

Nuclear Fission is the splitting of the nucleus of an atom which releases enormous among of energy and radiation. This is what is used in nuclear bombs and energy.

Fusion if the opposite process which is the merging of nuclei. This is actually the same process taking place within the Sun and stars. The obstacle has been generating enough heat here on earth to accomplish this process. There are MANY companies involved in this process and if accomplished, then we would be looking at the end of fossil fuels and the cost would be infinitely smaller. This could be the next major innovation that spurs a leap forward in the economic progress of humankind.

Cold Fusion is the dream of creating this process at room temperature. Before we see this technology in use, we are probably looking at the next wave 2024-2028. Keep in mind, that if this technology is accomplished, it would profoundly change everything.

Low-Energy Nuclear Reactions & the Economic Confidence Model

Posted on November 16, 2015 by Martin Armstrong

QUESTION: Martin,

Is there any conceptual common nonlinear resonance ground shared between the ECM and the underlying theory explaining LENR?

JAJ

ANSWER: Low Energy Nuclear Reactions (LENR) are indeed very interesting. I have concluded that whatever process we observe in any area of science will be discovered in all layers. What many consider “cold fusion” may not be fusion at all. The Widom-Larsen theory does not require any new physics discovery of laws. Essentially, the Widom-Larsen theory states what is actually taking place is a multistep process. The Plasmon modes in hydrated metals (like surface electrons acting collectively as a herd or mob) are energized in various ways and are then absorbed by protons. This produces a very low energy neutron, which is the reverse of neutron decay, due to the weak nuclear force. Now these low-energy neutrons are absorbed rather easily. Consequently, this creates a cascade effect of unstable isotopes that go into beta decay. During the beta decay phase, gamma ray photons are ejected and collide, hitting the metal Plasmon. At that moment, they are shifted (like a phase transition) into mostly IR (heat) with a soft X-ray tail.

This would explain cold fusion, which is a hypothetical type of nuclear reaction at room temperature. This is the opposite of what takes place in the sun. There is currently no accepted theoretical model that would allow cold fusion to occur.

I can say that the Widom-Larsen theory would appear to follow the structural design of economic changes as well. The majority must be wrong; that becomes the catalyst where the smallest amount of pressure against an overextended market at tops or bottoms creates the reversal in trend and the biggest move of energy. This phase transition creates spike highs and waterfall events of cascade failure that results in major panic lows. Every investigation assumes some huge player has overpowered the market, but no one has ever been discovered since 1907. The source of energy comes from within. The punch can be anything. The system is set up at an extreme, so it can be akin to a herd of zebra –– one zebra sees a lion and begins to run, which causes the other zebras to start running, despite never seeing the lion. This is the release of energy (heat so to speak) from a resting body.

Carving up the Middle East

Posted on November 17, 2015 by Martin Armstrong

QUESTION: Why did ISIS target France rather than Germany? Someone said it was France who created Syria. Is that really true?

ANSWER: Germany is not actually a target in this chess game. It is one reason we selected Berlin for our conferences even compared to London since we had Panic Cycles in November. Germany has less than 62,000 in its army and being in the army in Germany was perhaps worse than a tax collector. The joke was the German army does not shoot. Germany is not in the view of ISIS as is France, Britain, and USA. Germany may be the biggest economy in Europe, but the people blamed their own military for the nation’s suffering as did Japan.

Indeed, the Middle East, as we know it today, emerged from decisions made by the Allies during and after the World War I. It was Britain and France who took it upon themselves to transform what had been provinces of the old Ottoman Empire into the modern states we have come to know, This has created an international tinderbox that remains at the core of the current conflicts and politics in the Middle East.

The partitioning of the Middle East into the Arab provinces of the Ottoman Empire was set under the terms of a secret Sykes-Picot Agreement of April-May 1916. The agreement gave Mesopotamia (Iraq), the Gulf and the regions bordering Palestine to Britain, and Syria and most of the eastern part of the region to France.

The Cairo Conference was a meeting of Britain’s Middle East experts which began formally on the morning of Saturday, March 12, 1921. The conference approved a plan for giving control over two large pieces of the former Turkish territories that Britain controlled to princes in the Hashemite family. It was agreed that Prince Feisal, with whom T.E. Lawrence had worked during and after World War I, would become king of a new country created from the Turkish Province of Mesopotamia; it would be called Iraq. His brother, Prince Abdullah, would rule a country made up of Palestine west of the Jordan River: Transjordan (now Jordan).

Britain’s interest in the provinces focused on safeguarding the trade route to India, to ensure cheap and accessible oil for the Britain’s requirements. Therefore, maintaining the balance of power in the Mediterranean was essential to its economic advantage.

France hoped to maintain its centuries-old ties with the Syrian Catholics. In so doing, France looked to establish a strategic and economic base in the eastern Mediterranean. It was not oil then, but maintaining a cheap supply of cotton and silk and prevent Arab nationalism from destabilizing France’s North African empire. Therefore, it was France who held Syria in the partition process. That is coming back to haunt them to this day.

Reforming the Federal Reserve

Posted on November 16, 2015 by Martin Armstrong

QUESTION: In your Nov. 15 blog you said about the Fed “ I do not think in its present form it should be owned by banks collecting 6%. I would advocate a public float as is the case in Switzerland. Can you explain what that means, and how that works. Thank you

 

I sincerely hope you continue your blog. I have been trying to get a handle on how the markets work. It really requires a lot of thought until one can feel comfortable.

There is a ring of truth to what you say.

Thank you.

ANSWER: The Fed is far more independent than many portray. Its decisions to raise or lower interest rates are not at the direction of bankers, but its understanding that it must steer a realistic path. Yellen has inherited a nightmare. Raised were lowered and the Fed became trapped, They stopped buying 30 year bonds and moved to mortgage securities. It cannot sell anything it now holds. Yellen realized that the pension funds will go belly up and keeps saying the rates must rise to be “normalized”.

The Fed is far too much influenced by politics. We cannot afford a central bank controlled by politicians. Likewise, bankers should not control the Fed if they no longer retain loans on their books and sell them becoming transactional bankers.

The only solution would be that the Fed is floated publicly so anyone can buy shares. The influence of politicians and bankers must come to an end. Banks should NOT be qualified for any bailout on their trading – PERIOD. If they do not retain loans, they are not entitle to use elastic money. Floating the Fed makes it a private corporation that must report its balance sheet like everyone else. Congress MUST be forbidden to order the Fed to do anything. That has been the problem all along. Stimulation should be returned to buying corporate paper, not hand banks cash and hope they lend it out. Enough is enough.

Fed v Congress v Bankers

Posted on November 15, 2015 by Martin Armstrong

QUESTION: Don’t you think it is wrong that the private banks own the institution that administers them.

ANSWER: You have to understand what was intended. It was originally a bailout entity for banks so they had to fund it. That made sense initially, Then with time and circumstances, the Fed has morphed into something that is now some quasi-political-governmental-agency that nobody would have created from the outset.

I do not think the Fed should be owned by the Treasury since then politicians will control it for political purposes. I can hear it now: “Vote for me and I will give free interest on credit cards!” I do not think in its present form it should be owned by banks collecting 6%. I would advocate a public float as is the case in Switzerland.

My point is the politicians keep changing the Fed and relieve themselves of ALL fiscal responsibility for economic booms and busts and blame the Fed, which is wrong, since they are the primary cause of aggravating the business cycle.

I do not advocate conspiracy theories against the Fed or criticism of exclusively the Fed ignoring the role of Congress. To solve the problem we MUST look at the whole. You need a central bank to clear. Bank failures were because of relationship banking where they borrow short-term and lend long-term. Elastic money made sense under the idea you did not have to liquidate loans to repay depositors in a panic. The elastic money would expand during a panic and then contract when over.

Now that banks are doing transactional banking and not holding long-term loans on their books, then they no longer need elastic money or bailouts and should collapse when they screw up. They should be held for CRIMINAL prosecution if they are trading with other people’s money. You cannot have it both ways. If the Fed is to stimulate, then they should buy corporate paper, not government, and then the money is directly injected into the economy whereas currently the banks still refuse to lend money long-term.

The Fed is caught between politicians and bankers. That is not a very nice place to be these days. We will have to REFORM this position after the crash, but eliminating the Fed will create chaos and it will not solve the problem as long as Congress has any power to create debt and the big banks moved to transactional banking abandoning relationship banking.