When it Rains – Pours Oil

Oil-Discovery

A major new discovery of oil has been made in Britain by Gatwick airport (as reported by BBC). They appear to have discover about 100 billion barrel supply of oil ONSHORE in Britain. The North Sea Oil has produced 45 billion barrels in the past 40 years. This may be significant for Britain.

CRUDE-Y 1-1-2015

While an annual closing below $41 will be bearish and an annual closing below $31 will be profound, an annual closing BELOW $25 will be devastating to the long-term prospects for crude oil. That would suggest that in real terms (adjusted for inflation) we are not likely to see that exceeded for at least 26 years and perhaps more like 37 years.

GC-1982 Dollars

This would be similar to what took place in gold from 1980. That high in REAL TERMS has still not been exceeded even during the rally into 2011. Hence, the discovery of oil in Britain and elsewhere appears to be in line with the long-term cycle. For now, this is feeding into the deflationary cycle currently in motion.

Europe’s Refugee Crisis

June 7, 2014 - Mediterranean Sea / Italy: Italian navy rescues asylum seekers traveling by boat off the coast of Africa. More than 2,000 migrants jammed in 25 boats arrived in Italy June 12, ending an international operation to rescue asylum seekers traveling from Libya. They were taken to three Italian ports and likely to be transferred to refugee centers inland. Hundreds of women and dozens of babies, were rescued by the frigate FREMM Bergamini as part of the Italian navy's "Mare Nostrum" operation, launched last year after two boats sank and more than 400 drowned. Favorable weather is encouraging thousands of migrants from Syria, Eritrea and other sub-Saharan countries to arrive on the Italian coast in the coming days. Cost of passage is in the 2,500 Euros range for Africans and 3,500 for Middle Easterners, per person. Over 50,000 migrants have landed Italy in 2014. Many thousands are in Libya waiting to make the crossing. (Massimo Sestini/Polaris)

June 7, 2014 – Mediterranean Sea / Italy: Italian navy rescues asylum seekers traveling by boat off the coast of Africa. More than 2,000 migrants jammed in 25 boats arrived in Italy June 12, ending an international operation to rescue asylum seekers traveling from Libya. They were taken to three Italian ports and likely to be transferred to refugee centers inland. Hundreds of women and dozens of babies, were rescued by the frigate FREMM Bergamini as part of the Italian navy’s “Mare Nostrum” operation, launched last year after two boats sank and more than 400 drowned. Favorable weather is encouraging thousands of migrants from Syria, Eritrea and other sub-Saharan countries to arrive on the Italian coast in the coming days. Cost of passage is in the 2,500 Euros range for Africans and 3,500 for Middle Easterners, per person. Over 50,000 migrants have landed Italy in 2014. Many thousands are in Libya waiting to make the crossing. (Massimo Sestini/Polaris)

The illustration of how the EU is going insane with the austerity movement when they are in direct conflict with the perpetual borrowing lacking monetary reform, Italy has cut its budget to the bone. That was the only thing stopping all the refugees pouring into Europe from North Africa. Many are dying at sea because the Italian Navy did save many in addition to intercepting the drug trade. But that patrol stopped – not budget. Many people are fleeing claiming to be political refugees and thus have no passports to even prove where they have come from. This is economically placing a major burden on the economy and Germany is getting flooded. You can’t turn them back without looking cruel. The whole refugee crisis is really becoming a crisis.

European Conference – Berlin Nov 28/29

WEC-2015-2r

 

We strongly urge our regular clients to lock in your seat for the Berlin European World Economic Conference. We increased the venue size and even that is more than half sold out already. With all the major publicity we are getting on the business cycle in Europe, we do not want our regular clients to be blocked. This is why we began the registration process early this time for as things heat up, there is always the mad rush at the last minute.

Resurrecting the Woolly Mammoth

mAMOUTH

Scientists are now close to resurrecting the woolly mammoth. They have been working with two mammoth specimens excavated from different parts of Russia and from different eras — one nearly 45,000 years old, the other just 4,300 years old , reports Cnet. Scientists have sequenced a nearly complete genome for the extinct mammoth. Would it be great to resurrect Ben Franklin and Thomas Jefferson to straighten out this mess we call government?

The Fractal Nature of Capital Flows – Government Running Wild

CAP-WAVE

QUESTION: Dear Mr. Armstrong, If bull markets are defined by currency flows, how do you explain the fact that the Chinese stock market has over doubled in 12 months?

Thank you.

ANSWER: I have learned over the years that if someone does not want to listen, you cannot convince them of anything for their mind is already made up and will never change.

Nothing but nothing would move without capital flows domestically or internationally. The movement of absolutely EVERYTHING is driven by human nature running into something (boom) or fleeing (bust). Capital flows are by no means confined to just international movement. Internally, capital MUST concentrate where everybody runs to invest in something be it DOT.COMs, gold, real estate, stocks, bonds, or whatever. It does NOT matter what the instrument is. There will always be a boom and bust and those who blame dark forces are just fools for there is nothing that is ever exempt from the boom-bust cycle.

International capital flows is what has made the global economy expand post WWII. As governments hunt down capital everywhere, they are destroying the world economy at a staggering rate. By the time they figure out what they have done, it will be too late. You cannot repair the damage in 30 days of less. Everything we constructed since World War II will be destroyed by this trend in government to consume every scrap of loose change to maintain the Marxist/Keynesian theory that they should and can create the perpetual economic growth without the cycle.

money-stock-1980-2011

 

We can see from the Fed’s chart tracking VELOCITY, that it looks like the collapse of the 1929 Depression thanks to hunting money and FATCA. This has wiped out liquidity so when the markets turn down, there will be a lot more flash crashes to blame on someone other than government. We are complacent in allowing our politicians with ZERO experience in running an economy be in charge of our entire future way of life. In that respect, we deserve what we will get in return for our collective stupidity. To get a job they want some degree. We elect lawyers to run an economy. That is like going to a massage therapist to do brain surgery. SORRY – they are not qualified and just look at the game of chicken the EU is playing with Greece. They will destroy Greece and the EU with this stupidity.

I have stated countless times that it is the CONCENTRATION of capital into one sector that causes the boom. Each 8.6 year wave is a different flavor. One time it will be commodities, then stocks, followed by bonds and real estate, and then the shift from sectors domestically will change.

So if you really only want to cling to your fixed beliefs, then why bother reading anything. You will only look for news that supports your biased view and will never learn from your experience for you will cling to your theories like a passenger on deck of a sinking ship. This is the very complacency that has allowed government to run wild.

From Frankfurt – With Something

Frankfurt

I am update now from Europe where I will be for nearly two months. Lots of meetings and they would like me to debate a few economists in a discussion on stage. That should be interesting.

Those interested in watching the Germany TV Show that appeared nationally on Friday can watch it here –¬†ZDF-Aspekte (Aspects). The entire interview can be seen here at this link.

I have been explaining there is never any change without the pain. The fact that I am here in Europe and being covered on national TV in Germany and Holland to start, demonstrates that it is indeed economic pain that creates the change. Reform can take place in a variety of ways from simply electing someone else, or you go all the way to revolution. Hopefully, we can be civilized and inspire profound reform short of bloodshed. The exciting point here is that for the first time perhaps in Western culture history, mainstream media in Europe, which is far more independent in Germany than the United States, can help the people by at least showing them that the business cycle exists.

The entire Marxist/Keynesian agenda was that government should and could steer the economy to achieve the land of utopia with no boom and bust cycle. You cannot eliminate the cycle and so many have tried at the cost of tens of millions of lives. So the question remains, can we EVER learn from the past mistakes of our fathers to forge a new system for the future?

I arrived in Frankfurt this morning. Within 30 minutes, the building gets locked gown and we are told to evacuate. Just in case this is a Banker-Terrorist attack to cut me off from a long list of meetings and I never return – GS did it.

suspicious-smiley

Updating the Markets – The Key is the Corruption That Will Make the Turn

corruption

The political corruption is just now in the open and politicians don’t seem even bothered figuring it all blows over in a week or two. This corruption trend in politics is indicative of what we need in place to shift the CONFIDENCE from government to private come 2015.75. There hasn’t been much to write about for the markets¬†have done pretty much what our computer had forecast – churn going nowhere into May.

GCNYNF-D 4-25-2015

Gold has been turning back down as it has lost much of its luster among broader base investors. In fact, there are people now starting to say gold is dead since it has declined in the face of monetization by the Fed and the ECB. The wider view is the gold rally was all hype and it will never rally. This too is what I warned MUST take place BEFORE you get the low. We had to “shake the tree” and get them all out.

Everything appears on schedule to bottom with the Benchmarks. If that unfolds to the week, then this too will confirm we have a bubble top in government that should manifest itself in the bond markets.

DJIND-W 4-25-2015

We can see the churning in the share market. Volatility should start to rise come the first week of June. There remains the potential for the final flight to quality if the share market declines, people will run to government bonds even at negative rates. That should create the major high in bonds.

So while it may appear there is just depression story after depressing story about corruption, hopefully you will get a taste of what is necessary to turn the cycle. This is the collapse in trust of government. The paper currency, of what remains, says “IN GOD WE TRUST” not “IN GOVERNMENT WE TRUST” They are not one and the same.