Jackson Hole

There was no surprise from the Bernanke statement other than basically he can justify more easing if he wants to. He has admitted that the recovery has effectively faltered and is “far from satisfactory,” and as a result, the Fed “should not rule out” new policies. However, Bernanke stopped short of outlining the specifics of any moves to embark on QE3 and next week we have the more important ECB meeting with the Fed due 9/13. Gold has rallied up following the Daily Projection Line from this morning’s low to the first resistance area at 1683 with the Weekly Bullish Reversal. 1674.3 is the high of May which was the low on this move so that has been exceeded intraday. It is always the Monthly Bullish Reversals that are the key to any change in trend even short-term. They still stand at 1770 and 1796. So there is nothing that indicates a change in the trend and we have performed as the computer warned a year ago that a high at this time was in the cards. Of course the rally comes on the back of the presumption of inflation, but the contraction is still far too great. Unemployment is in a bullish mode and the rising pressure on tax collection worldwide is causing a decline in VELOCITY warning that capital is more likely to go into hiding. With taxes in the USA jumping from 15% to about 45% in January, this will take a lot more than QE3-6 to do anything. Even Keynes argued that to stimulate you needed to lower taxes. Everyone is raising taxes precisely when they should not be doing so, But governments are desperate to keep interest rates down. Inflation tracks interest rates. When they start to rise, then the recovery will begin and inflation will at last emerge. If government stupidly continues to buy back bonds, sell them to them. Take the cash NOW! The next leg will be when they start to chase money and it runs away and then rates will rise rapidly. For now, even Italy sold its long-term debt. There are still a lot of stupid people buying government debt. The fat lady remains silent.

OBamaCare – The Worst of All Worlds

I personally see no difference between Republican and Democrat. Neither party gives two shits about saving the nation or protecting the people. The Republicans used 911 to usher in the new age of no civil rights. We surrendered all our rights in order to enable government to track 19 guys and a camel. It is amazing how nobody knows who I am to get on a plane, train, apply for a license for anything, yet when it comes to taxes, they know precisely who everyone is, where to find you, and what they can confiscate.

All this 911 bullshit has been matched by a host of financial laws all geared to confiscating wealth. The attack on foreign entities threatening to confiscate all their wealth if they fail to report what any American is doing overseas, is single-handedly  causing a global contraction in the VELOCITY of money, we have to wonder what brain-dead bureaucrat originated this one.

Obama has publicly stated that anyone who has made money did not do it alone and thus they were incapable of being entitled to their wealth. They owe everything to government – hello Maximinus I. Historically, government never lives within its means. It then abuses its power to constantly change the laws in midstream. They see nothing wrong with someone buying a home, planning a budget, and then they raise taxes on them both on income and then property taxes. No one would sign a lease that said the landlord can raise the rent whenever he needs money. Yet this is what government calls paying your “fair share” of their fiscal irresponsibility. You might as well give your credit card to your 16 year old and watch what happens. They could run for Congress with such qualifications.

Now I can state PUBLICLY that my healthcare has just doubled in price. The insurance companies are going nuts. If they can force you to drop out at all, guess what. Pre-existing conditions do not apply until 2014. So healthcare costs have just gone through the ceiling. Add that to taxes jumping by 50% come January 1st, it certainly looks like the standard of living in America is about to be sent into the stone age. Thank you Congress! Just once, it would be nice if you guys really consulted people other than those who have their hand sticking out.

Will we Collapse by August 2013?

Former Clients familiar with the Economic Confidence Model have asked is this a rapidly advancing cycle as was the cast in 1989? The Answer to that question appears to be YES! There, we had the 1987 Crash on the half cycle followed by the collapse of Japan in 1989, and then the rise and fall of South East Asia as the US S&P 5oo bottomed precisely with the low of that wave in 1994. The accuracy was astonishing from the 1987 Crash right to the day, the peak in Japan 1989.95, and then the precise day of the low in 1994. This wave appears to be working in a very similar manner. This means August 7th, 2013 we must be very careful about next year. We will be looking at the global markets at the upcoming conferences (San Diego-Bangkok-Berlin) around the world. So yes! This is a very serious development. We may not last until 2015.75 and that could be the complete economic meltdown.

The US Government is closing its Iron Curtain around everything. Not only are European banks throwing Americans out, HSBC will not deal with Americans in Asia, American Express will not issue any card to an American even working for a foreign company outside the USA. The Post Office will not allow you to mail any cash. European mutual funds are now refusing to accept American clients and US mutual funds are starting to retaliate refusing to accept Europeans. Even the Hedge funds are being put at risk from draconian US laws that any foreign entity who deals with an American, must report what that American is doing overseas or their own assets will be confiscated in the USA. This whole thing is going completely nuts. This is not  freedom, justice for all, nor “capitalism” – it is authoritarianism! Any American who even lives overseas owes taxes to the USA because he was BORN American. There is no “fair share” because you used or even received anything. Americans have become economic slaves and everything they produce or own is subject to the whims of the government pleasure.

Everything possible is being done to confiscate wealth. This is rapidly causing the collapse in the VELOCITY of money and is spiraling the global economy into a dark crater. This is all to pay bondholders. Those who have been counting on HYPERINFLATION fail to realize that the bankers will not stand for that. They demand the world be shaken down to its roots. We are entering the age of Atlas Shrugged. Capital is contracting. Global investing is starting to collapse. We are headed into something far worse than the Protectionism of the Great Depression. This is how you destroy freedom and civilization. So while they keep the idiots focused on abortion and gay marriage as the ONLY important issues to waste their votes, your economic future is being destroyed. The youth are not getting married because they cannot afford it and may be only the gays will be left who want to marry at the end of the day. Unemployment among the youth is outrageous. It has exceeded 50% in Spain and this was the cause behind gangs roaming in Philadelphia attacking random people on the street as well as in London. Unemployment among minority youth in the USA has exceeded 50%. By next year, it looks like HYPERINFLATION would have been a blessing. This is the worst of the worst.

New FDA Act to end Canadian Mail Order Drugs at 50% of the Price

The Government has been lobbied to include under the pretense of safety, the importation of medication that saves the consumer about 50% of the cost. Again, Congress bows to greasing their personal interests by special interests. This is never about the average person – only about the lobbyists as is the case with the banks. Until political reform takes place with a single term politicians, there will be no hope in reforming the debt and those avoid a witch hunt for taxes that will reduce the VELOCITY of money.



Gold & The Computer

Many people have been writing about the computer forecast for gold on the monthly level and are astonished how it can write a report on time. TIME is an entirely different dimension and it must be respected as a entirely separate field. No individual is capable of forecasting the future with consistency. Perhaps there was a fight with a spouse or a conflict with the IRS. Such things emotionally distract an individual and as a result, they forget some thing to check or they are just too domestically focused. Others are “married” to a position. Some are married to an idea as with gold and will NEVER say sell – only buy. That is not analysis, it is dogma. To be consistent it takes the UNEMOTIONAL perspective. This is true in government where self-interest prevents politicians from being objective or analysts from just calling it as it is without being biased. The computer model is nearly functioning monitoring the entire world 24/7. This has been a major effort with people around the world. We will in the future have a special event in Switzerland where people will be able to talk to the computer and ask it questions. For now, this is what it wrote and was published for the December Conference last year that has so many astonished for it does not matter about the fundamental news. If it is a declining market, good news is never good enough. If it is a rising market, bad news is ignored. Trends are NOT easily reversed. They must play out their TIME. So all the nonsense about manipulating the world economy or that I am some gold hater because I dare to say it is like all markets, it goes up and down, just fall to the ground as dust in the wind. Markets will do what they do according to TIME. It is vital to understand the concept of turning points. It is never about who is right or wrong. That is for children – mommy he did this! Grow up. This is about surviving the future – not selling bullish ideas.


Looking at our empirical models, the ideal primary target for the next turning point appears to be March 2012 thereafter we see a two-month move in the opposite direction initially there appears to be a fairly large change in Trend developing in September of 2012 which can lead to a move into the January 2013. Therefore if March unfolds as a reaction high we could see a retest of support in May with a   reaction high into August for Labor Day and a decline into a final low in January 2013. It is clear that January 2013 should be a very important target. If that is a low then we should be able to see a significant rally into 2017 thereafter.”

Sometimes a computer is the clearest way to see the future. It is not biased and just calls the shots as it sees it.