QUESTION: Mr. Armstrong, I know someone who attended your 1985 Conference in Princeton. He said you illustrated the huge volatility, and forecast there would be the Crash in 1987 and 1989. He said you forecast the G5 would be the source of that volatility, and that there would be a Sovereign Debt Crisis that will begin 2010. But the most amazing forecast he said you bluntly stated that marijuana would begin to be legalized in 2013. How could you have made such a forecast?
Just curious.
Thanks
JP
MARIJUANA TAX STAMPS
ANSWER: The legalization of marijuana is precisely 43 years after it was made illegal following the 1969 Supreme Court decision that led to the Controlled Substance Act that began in 1970. The legalization of marijuana takes place simply as forecast because they need money – it is linked to the Sovereign Debt Crisis. The very same pattern took place with alcohol. Turn the economy down, the government legalizes what is illegal to make money. Casinos are now everywhere.
The fascinating thing about taxes has been the thinking process behind them. Back in 1937, Congress imposed drastic new regulations and taxes on marijuana, cocaine, and opium, which was then legal. The tax on marijuana was a direct attempt to restrict its use. They were legalizing alcohol but really felt they had to be punitive with something else. The Prohibition was targeted to get Italians and Irish Catholics. This new tax targeted Mexicans.
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The marijuana tax was really being used to criminally prosecute Mexicans who were widely seen as taking American jobs during the hard times. In 1967, President Johnson’s Commission on Law Enforcement and Administration of justice opined, “The Act raises an insignificant amount of revenue and exposes an insignificant number of marijuana transactions to public view, since only a handful of people are registered under the Act. It has become, in effect, solely – a criminal law, imposing sanctions upon persons who sell, acquire, or possess marijuana.”
In 1969, the Supreme Court overruled the tax in Leary v. United States, It held that part of the Act was unconstitutional for it violated the Fifth Amendment by forcing a person seeking the tax stamp would have to incriminate him/herself. Congress then passed the Controlled Substances Act as Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970. The 1937 Act was repealed by the 1970 Act. Hence, 1/2 of 8.6 is precisely 4.3.
With time, people forget the original reasoning to outlaw alcohol and then opium, cocaine, and marijuana. There is the argument that there should be a “sin tax” to encourage people to stop a given practice. Governments applied the same theory in tobacco. Make cigarettes expensive and you will reduce their use and sales. Now they want to tax electronic cigarettes simply because they are losing taxes from real tobacco.
Interesting facts behind taxes has been raising taxes on the “rich” (household income of $250,000 in USA C$150,000 Canada), will somehow not reduce the economy and result in fewer jobs. They realize raising “sin taxes” did reduce the use of cigarettes. So why will raining taxes not reduce the economy as well? Political thinking is never logical nor consistent because they lie out of their self-interest – not to help the people, With them, government is just the legal means of robbing the people while claiming you care so much.
The forecast was rather simple. 4.3 is half of the 8.6 frequency times 10. Hence, 1970 plus 43 years brings us to 2013 and that was 2 years after the Sovereign Debt Crisis begins. That target 2010.29 was the Pi target and that was the start of the crack with Greece. That same target was the World Trade Center attack – 911 (2001.695)
