Crowd Walks out on Obama


Obama is going down as perhaps the worst President in history. One would think he would be concerned about his personal reputation. Nobody wants him campaigning for them – they call Bill Clinton before Obama. In a rare appearance on the campaign trail on Sunday with a rally to support the Democratic candidate for governor in Maryland, the crowd began to break up and many just walked out while he spoke. Obama’s unpopularity is just amazing. His approval ratings are hovering around record lows and when the economy turns down after 2015.75, there will be a year left for him to play more golf and not much else.


Most candidates from his party have been dodging him. The Democrats are likely to lose the Senate and they feel that he is the leading cause. Just wait for the worst of the Obamacare to hit when people are taxed on benefits and the IRS starts seizing people’s houses and property just for fun. Of course he delayed that part until 2016 when he get to go out-of-town.


Dow for 10-30-2014

DJIND-D 10-30-2014


Here is Thursday and we have broken back up to new highs on our cyclical models without electing a bullish reversal yesterday. Resistance stands at the 17195 level and a closing below 17000 today will imply that we have a high in place. Closing resistance will stand at 17010, 17143, and 17246. We need a closing above at least 17,143 to imply that we could continue higher into next week. Otherwise, a failure to closing above 17142 will suggest we may have the high today.

Tomorrow is the end of the month. We are looking at a closing below 16898 tomorrow will suggest that we should press lower. A closing tomorrow below 16920 will imply that we may see a break next week back to test support.

We have the elections next week. While the Republicans may gain seats in the House and retake the Senate, the sad part is this is still unlikely to create any change. Unless you can get rid of the leadership, there will be no change. The Republicans will still support the NSA and other Draconian measures as we…

Greek Bonds Get Smashed – Prelude to the Euro Crisis?

Greek 10Yr 10-30-2014

Greek bonds were being sold again sharply today. The 10 year bond spreads to Germany are wider by 60 BP on the day! Rumors are always floating around and maybe we should just expect more intraday volatility; especially given that the chasing opposition SYRIZA party have been gaining steadily in recent polls!

Brussels will only attempt to consolidate power, never to solve the crisis. They only see everything through their own self-interest. Consequently, this is not about helping Europe weather the storm their created with a single currency without a single debt. Can you imagine if the reserves of all banks in the USA were based upon an admixture of state bonds absent federal issues? Such a system would be playing Russian roulette never knowing which banks are safe and who bought the wrong bonds.

Spies Play the Same Game as Int’l Bankers


British intelligence service has finally admitted that is seizing the information on people without any legal warrant or supervision. They are accessing raw material collected in bulk by the NSA in the USA and other foreign spy agencies without a warrant (reported the Guardian). What is really taking place is secret deals. It is illegal for many to spy on their own citizens so they allow each other to spy on the other’s citizens and then they swap the data all pretending to be illegal.


This is the same way the banks play games. The MF Global deal takes the money from accounts in the USA each night and sends it to London. To put money into REPO in London, they MUST have the authorization of a the client (owner of the money). The US branch then signed the documents in London as the “client” of the London branch so everything is nice and legal. The problem is that in the USA, they never get the approval of clients to send their money overnight into the REPO markets. Hence, they all play games between each other to circumvent the laws.

IRS is Seizing Money of Small Business Operator Routinely!


The new trick the IRS has been doing is attacking small mom and pop businesses on a ROUTINE basis. The number of reports coming in from around the country are outrageous where small businesses deposit daily receipts under $10,000 kicks off their rule about what is known as “structuring” – depositing money under $10,000 or withdrawing that cash to avoid reporting by banks to the IRS.

If you deposit $10,000 or more, the bank must report the transaction to the Internal Revenue Service, and you’ll need to explain where you got the money. Don’t even think about dividing the cash into smaller amounts to stay below this limit, because the IRS can investigate you for structuring, which is an attempt to prevent the bank from reporting your deposit. Structuring is illegal. Even if you earned the money through legal channels and paid the necessary taxes, the IRS can charge you with criminal activity and take your money.

The IRS will now just seize your accounts and it becomes your burden to get your money back and that you were not STRUCTURING. Good luck. To simply deposit regularly small amounts of money means you are more likely than not never going to see that money again. Whatever you have in your bank accounts, the entire thing, will be taken by the IRS leaving you penniless. The problem that is developing is that more and more small businesses are being forced into bankruptcy because of the IRS. Try and get your money back and it will take months if you have the lawyers.

The accounts of Carole Hinders, pictured above, at her small cash-only Mexican restaurant in Arnolds Park, Iowa. The NY Times reported how last year tax agents seized her funds. Small business is so often attacked by tax authorities both federal and state all because these people are dead broke and are hunting money desperately.

The IRS is desperate for money and they are hunting loose change everywhere. Judges are ruling in their favor routinely for their salaries and pensions are also at stake. They are looking to regulate your accountant and where they want to go is to compel them eventually to turn you in if your avoid taxes. They are seeking somehow to break the bonds of client confidentiality.

Then there is the tax on healthcare that is coming – the Cadillac Tax of Obama. Anyone who has a benefit will find the IRS declaring that to be income and they will want their pound of flesh.

Between FATCA and Obama’s girl, Christine LaGarde of the IMF threatening to ban countries out of the SWIFT system unless they turn over lists of all foreigners with accounts, this Sovereign Debt Crisis is wiping out the economy faster than anyone suspects. Nobody will even look at the impact of these actions because all they see is dollars and they want them for themselves.


Constantine the Great Pictures with Sun God – Sol


Those in power even threatened to ban the Vatican from the SWIFT system. Look, when it comes to money, religion means nothing – that is just something to keep the masses in check. Those in government have always looked to confiscate the wealth of religions for their own use. Constantine pretended to be Christian so he could confiscate the wealth of all Pagan Temples. Henry VIII was desperate for money and confiscated the Catholic Church. Let’s not forget Napoleon who imprisoned a Pope. Then there was Philip IV of France who confiscated the Catholic Church and moved it to France/ He then installed a French puppet to be pope who declared the Nights Templar demon worshipers so he could confiscate the assets they held for others. Don’t forget he confiscated and jailed the Italian bankers after he could not pay his debts to them So LaGarde threatening the Vatican was within the historical context. Those in power are NEVER really religous – they just pretend to be. It does not matter if you are Catholic or not. No religious order will EVER be exempt.

It does not appear that we have a prayer in hell here of stopping the total destruction of the World Economy. Everything that was built post-WWII was on the free flow of capital that made the world prosperous. That world flow of capital is off tremendously and the hunt for taxes is reducing global investment. This will lead to astonishing volatility in the years ahead.

Dow Jones for 10-29-2014

DJIND-D 10-29-2014


We really need to see a closing in the Dow above 17010 to imply we will see perhaps further upside. However, we have technical resistance at the 17200 area  and we need a closing ABOVE 17160 to hint at further higher highs.

We still see next week are critical so hold on to your hat, we may be in for a rise in volatility if we see a high form on Thursday. A closing today below 17032 will keep the market a bit contained whereas a closing BELOW 16932 will see it back off first then retest the resistance for Thursday.

Best Form of Government – Will Anything Ever Work?


Hi Martin,

I understand you negative opinion on Socialism & Communism, but I’m confused by you opinion on a Republic. On paper a Republic looks like an ideal form of freedom, where-as a democracy dictates majority rules and 50.01% can do a lot of damage to the remaining citizens.

I understand that through history Republics have failed just like every other form of government, but are you suggesting that a democracy will not succumb to human failings and turn on it’s people like this Republic of the United States has?

Best regards,


ANSWER: There is no single form of government that will ever be perfect. Whatever its form, government will self-corrupt and both sides will fight between the people and government perhaps eternally. The best form of government for brief periods of time are benevolent dictators, monarchs, or emperors, such as Julian II, who even decreed that whatever laws he passed must also apply to himself. Such individuals are rare indeed and once they are gone, the system will revert back to its corrupt state.

Another system that actually worked very well was Genoa. There the “Doge” (head of state) was selected each year from the head of a prominent family. The rich families ruled on a rotating basis annually. What made it work well was the short-term period. No family would ever pass something Draconian because it would apply to themselves the next year. The system was not one of rich v poor, but Genoa v Venice and Florence. The interests were furthered collectively rather than this philosophy of party politics. Therefore, each class benefited. It also lasted longer without corruption than Florence or Venice.

The best we can hope for is a hybrid between Democracy and a Republic that is restrained by a Positive Constitution rather than a Negative one as we have in the United States. In other words, if we have an everyday bureaucracy to run things that is subject to review by the people who rotate annually, there is some hope that it might last longer before it collapses. Much of the bureaucracy should be privatized where management will be proper and employee pensions will actually have to be there. When government is in charge, those in power just exempt themselves from the laws that apply to others – the first step in the corruption process.

With technology, each and every measure must be voted on by the people. There should be no Clean Water Act that has hidden some study on traffic flow in a city nobody ever heard of to line the pockets of someone’s family member. Voting can be done via your laptop and if each and every bill must be presented individually, that will stop the nonsense.

Judges CANNOT be appointed by anyone in government. They must be as Ben Franklin argued, nominated by the guild of lawyers. That way the best will rise to the top – not the most corrupt. Prosecution must also be independent and the people MUST actually indict meaning that they hear both sides in a grand jury. Plea bargaining must end and CONSPIRACY must end. Only those who are involved in a crime may be charged – no one else. No one charged with a crime may testify against another. Self-interest in prosecution must end.

While legal scholars tend to look at Article III of the US Constitution as based upon the English legal system modeled on Blackstone’s famous Commentaries on the Laws of England, Franklin argued for the Scottish System that was far superior. Indeed, the Scottish judicial system provided an important, but overlooked, model for the framing of Article III. Unlike the English system of overlapping original jurisdiction, the Scottish judiciary featured a hierarchical, appellate-style judiciary, with one supreme court sitting at the top and an array of inferior courts of original jurisdiction down below. What’s more, the Scottish judiciary operated within a constitutional framework — the so-called Acts of Union that combined England and Scotland into Great Britain in 1707 retained the independent legal structure of Scotland and prohibited the English courts from interfering with those of Scotland. The influence of the Scottish judiciary on the language and structure of the US Article III legal framework is clear where there is a Supreme Court with multiple inferior courts that are subordinate to, and subject to the supervisory oversight of, the sole supreme court. The Scottish model thus provides important historical support for the supremacy of the Supreme Court, however, the blending of this with the English system rendered the inferiority in Article III to operate as textual and structural limits on Congress’s jurisdiction-stripping authority from the courts. But the most dangerous flaw appears to be intentional – Congress appoints judges not lawyers. This allowed the English legal system to be politically manipulated whereas the Scottish System was really independent. This MUST be corrected to restore the rule of law.

Career politicians get bored and pass laws just to have something to do like in Utah you cannot drink before ordering dinner or in Europe regulating cow farting. This is why a representative form of government with career representatives is doomed to always fail. They can be bribed to enact particular laws to benefit some party. The only check and balance would be to rotate, as in Genoa, and to allow the people to vote online.

A raw unrestrained Democracy would devolve into mob rule. That we cannot tolerate either. There should be something that rotates as a Constitutional court as in France where each law passed MUST firs be ruled on as being Constitutional by a body of lawyers that rotates and MUST be trained in constitutional law which is significantly different from following statutory law. The former is structural design while the latter is following the letter of the law. This is a Positive Constitution that restrains government and is a real Bill of Rights. We have the negative form where government gets to do whatever it likes and we must prove we have any rights – very bad.

Debtor Prison

Prison should be outlawed for non-violent crimes. The ONLY reason a government has the right to restrain the liberty of an individual is to protect others from bodily harm – that is it. Every law passed by Congress states – “fine or imprisonment or both”. That must stop. Debtor’s Prison must end. The USA imprisons more people than the rest of the civilized world combined. Why are we so prison happy when only about 4% of the people in prison are there for a violent crime? A woman with children was taken to jail for not wearing a seat belt and the Supreme Court, being pro-government appointed by politicians, voted 5-4 that the police can imprison you for anything even if the crime does not call for jail time. We have a virtual 99% conviction rate because there is no way to win against pro-government judges. Fair trials are a joke. They do not exist in the Federal court system.

Learning from the Past

There seems to be the potential to at least learn from the various political types of governments, how they functioned, how long did they last, and what was the impact upon the people. The advantages of Genoa was that the short terms restrained the Doge compared to Venice where the Doge was for life. Venice froze the estate upon the Doge’s death and only THEN reviewed all his actions to see if anything was gained illegally. Then the state would reclaim the “illegal” gains. That was closing the barn door after the horse ran away.


Government is corrupt and rotten to the core – it is honorable only for brief shinning moments when the dark clouds leave a crack. One Pope Formosus (c. 816 – 4 April 896)  ruled against a Lord so the Lord rigged the game to become Pope and then put Formosus’ dead corpse on trial, had a friend answer for the dead Pope. Naturally, Formosus incriminated himself, who wouldn’t in such circumstances, and he was promptly found guilty, nullified all his decrees, and then claimed his property back. They will do anything – absolutely anything.


Julius Caesar (100-44BC) had to assume the role of high priest to create a calendar because the politicians were bribing the high priests to add days into the calendar to avoid elections. There is absolutely NOTHING those in power will not do to society for their own self-interest. Finding someone ethical who really cares is one in a billion.


The key is to review each form of government and take what worked and avoid what did not. We have to understand that no system will ever last forever. So the best we can do is design a system that has the best features and some internal mechanism of checks and balances. Nevertheless, whatever we can think of, will merely create the challenge for others to figure ways around. If we eliminate taxation and restrain government expenditure to what is required for natural expansion of the money supply to facilitate economic growth, then the majority of the lobbying will cease and therein lies the deepest cracks for corruption.