A Divine Update On Financial Markets
I thought I would make this post a little more entertaining than the standard groupthink everyone generally puts out. Especially since I watched Bernanke’s comments with horror this past Thursday. I couldn’t actually believe what I heard in the Q&A session. Then we recently have Janet Yellen stating that she never saw this crisis coming. And James Bullard recently stating that we aren’t in a bubble because all past bubbles were obvious. Well, I guess all past bubbles were obvious to everyone except Janet Yellen, James Bullard and Ben Bernanke since the Federal Reserve enabled every bubble since their inception and yet have missed all of them. It seems the more Bernanke and other Federal Reserve members open their mouths, the more they expose how the Federal Reserve is driving drunk. They have no idea what they are doing. And as noted on here ad nauseam, there is no proof that any of their monetary actions will create jobs or reflate the economy; the two mandates of the Federal Reserve. To the contrary, neither jobs nor the economy have responded in any proven and measurable way. But there is ample evidence the Federal Reserve has actually made the economic crisis of 2008 much larger.
The Federal Reserve and its actions are another sign of the dumbing-down of the modern corporate state. Maybe rather than driving drunk, Bernanke should ask Carrie Underwood if Jesus would take the wheel. Or, at least maybe she can sing that song for him. That has to have as much effect on improving the economy as Federal Reserve doofuses with their hands firmly wrapped about a bottle of Jack Daniels while trying to drive the U.S. economy off of a cliff. Or, at least they could have Mad Max take the wheel. He has already proven an ability to traverse a post-apocalyptic, dystopian reality. One that the Federal Reserve is helping to create.
So, let me make some opening remarks before I continue to the financial update. This is something I have noted on here in various comments over the years but I want to make this point in some greater detail as it pertains to 2013 and the “back end” of this crisis. The coming storm is something I have been talking about since 2008’s initial collapse. Well, before the 2008 collapse but regardless it’s coming.
Our perceptions of reality are substantially based on repeated cyclical patterns. Life itself is recurring and cyclical. The cycle of life – birth and death or destruction and renewal – that define our perceptions of reality is a fundamental law of the universe. Everything in the universe dies or is destroyed and is ultimately reborn or recreated. Humanity itself is born from the recycled matter of the universe or vice versa.
Perceptions of linearity really are, in many ways, the anomaly to life as we know it. Change is imminent in all perceptions of reality. It’s just a matter of if a particular cycle is a lifetime, a moment or a thousands of years. We see the illusions of linearity manifest itself in the status quo’s ignorance all throughout history. Or maybe I should rephrase that. We see this linearity in social behavior and its ignorance. Ignorance that involves the outsourcing of one’s beliefs to the Borg. By the assimilation into the conformity and dumbed-down idiocy of social groupthink. Never has this dynamic been so ingrained, widespread and systemic as in today’s world so propagandized by corporate media and marketing. And, of course, that endless corporate money that allows corporate state politicians to make themselves into any image conceivable to gain power and control over others. Corporations control almost every social value and belief in modern corporate capitalist society around the world.
In many ways, living in modern corporate capitalist society, especially that last 20 years, has given me an appreciation of what it it must have been like to live through many of history’s dystopian societies including the rise of Adolph Hitler or other equally ludicrous groupthink True Believer movements. Germany was literally turned into an insane asylum where people not mindful of their own groupthink saw their actions devolve into the most base ignorance of the crowd as noted by Gustave Le Bon in his studies.
It seems I am constantly pinching myself as a reminder to wake up from the dream or not to be drawn into the lunacy. Outsourcing one’s thinking is the basis for all dumbing-down and ignorance. And never before has so much of the world and all sources of information, including science, been so completely propagandized and politicized. In modern corporate capitalist society it’s nearly impossible to stand against the avalanche of dumbed-down groupthink and ideology without tuning out all political, media and even many supposedly scientific messages. And now that much of education has been corporatized and politicized, we are told what to think rather than how to think.
Actually thinking for oneself is dangerous. It creates dissent and questions that threatens dumbed-down corporate state authority’s control over our minds and our lives. We live in a world of figurative book-burning like has never been witnessed in history. In the U.S. both Democrats and Republicans have perfected that figurative act. It’s how they maintain control in the dumbed-down corporate state. That is, until this cycle of linearity and illusions is broken.
Cyclicalities can be represented by mathematical patterns like various Fibonacci patterns seen to define nature and the universe. They are literally everywhere from the spacing of tree leaves to the scales on a pineapple.to the length of the human arm to the shape of the Milky Way to the family tree of honey bees. There are many very profound theories including some using frequency and light (we are perceived as beings of frequency and light energy by science) to describe this phenomenon but in actuality we really just don’t know. Cyclicality can also be explained by the recurring mundane and planetary astrological-astronomical patterns that too repeat themselves. And, as I have noted on here before, science in many realms is re-embracing these astrological patterns and their potential significance. All one is acknowledging with astrological patterns is that planets, the sun, the moon and other forces of the universe influence and interact on each other. Often in cyclical patterns that we don’t understand. And, we can clearly appreciate from Einstein’s theories that these astrological bodies are nothing more than massively concentrated sources of extreme energy that are trillions times trillions times trillions …….. of times more powerful than any force ever created by man. And quite possibly that all life, including the human mind, may somehow be connected to these forces. Of course, it is quite plausible that the human mind created these forces. That it is the human mind that is the most powerful force in the universe and is responsible for its creation. And, thus responsible for the universe’s cycles of creation and destruction. And that would mean we can actually change the outcome. Which outcome? That’s right.
These are but two esoteric cyclical patterns that I rely upon to help guide my long term projections of the future of financial markets and the social science of economics. Well, and changes in the natural world. Frankly, they have proven to be quite useful and often very accurate. The cycle of volatility that the natural and social/economic world is experiencing, as coined on here over the last eight years, is a result of employing esoteric factors. And this cycle certainly has lived up to its billing both in the natural world and the world of humanity. Pure luck? Coincidence? That’s pretty lucky to anticipate such extreme volatility that, to my knowledge, has never been so prevalent on a global scale. More likely are that cycles are, in fact, at work.
Most people will mock such attempts to understand life’s cyclicalities and mysteries. Yet one should appreciate that science generally answers how and not why. I support the purity and essence of what science truly is without any equivocation, even though modern corporate capitalist society, corporate state politics and the hierarchical institutionalization of science has often perverted that purity and essence. Science has its role in the search for truth but it ultimately is lacking in a more fundamental ability to answer many substantial questions of why in addition to how. Yet a dumbed-down, corporate-controlled world generally ignorant of what science is and what it is not, are told to place all of their faith in the false god of scientists.
When it comes down to it, science is really nothing more than the recognition of repetitive patterns that we can then express through a language like mathematics. Is mathematics the divine language of the universe? At least as we perceive it? The most important questions are not how to identify those patterns or what those patterns are but why they exist. And, when one appreciates that science is truly lacking in any answers to why, discoverers and seekers of truth who have an intent to learn with an open mind often find their journey leads down more esoteric, mystical and intuitive paths. But, social groupthink of modern capitalist society mocks these innate abilities. Even though this mocking is based on ignorance. Humanity in modern corporate capitalist society has lost its divine connection to the universe and its intuitive, mystical feminine energy. And, thus, is often completely driven by the ego and its manifestations of rationalism and logic.
We see this ego-driven rationalism and logic everywhere. One example is in presidents and politicians who use the propaganda pulpit of media to make pleas to bomb the world into peace and democracy. Their arguments are based very eloquently on rationalism and logic. But, those arguments are void of any divinity. Those arguments are disconnected from their humanity. They mock our higher power or our divinity and our connections to each other and the world around us. Essentially, if you want to characterize it bluntly, they mock God. They mock the divine energy of the human mind, of all life and of the universe. Their rationalism and logic is void of our innate divine values of compassion, mercy, kindness, acceptance and love for our fellow man. This type of disconnected Godless rationalism and logic defines modern corporate capitalist society and is everywhere in positions of power over others.
The ego can conclude any action we take is rational and logical. The ego can rationalize anything. All we need to do is look at Wall Street, corporate board rooms and political institutions for confirmation of these endless rationalisms and rationalizations. But, the question is, are these rational and logical self-interested behaviors also divine? Is the rationalism and logic consistent with our higher power or that which makes us sentient beings? Or is it driven by the self and its perceptions of separateness? And, as a result, self-interest. Rationalized, willful, intentional attempts to harm others, or the world around us, is not divine expression.
These esoteric, mystical and intuitive paths to understanding the mysteries and cyclicalities of life were embraced by people much more brilliant than anyone I am aware of who is alive today, so preconceptions and closed-mindedness won’t serve anyone well when reading this. Especially when those preconceptions are based on ignorance and outsourcing one’s beliefs as all closed-mindedness is. And closed-mindedness and its associated intent of control defines the corporate state.
Every successful theory ever conceived by science was first an intuitive and mystical experience in the mind of its theorist. You may not have had that experience while studying differential equations or by studying any scientific curriculum but then you are simply learning through the intuitive and artistic experience of others. Even in cases where those theories are clearly incomplete or completely inaccurate. Which they often are. In fact, the only thing we know to be incontrovertibly true is only recognized by intuitive and mystical experience; that is, I know that I am. Our true divine identity is only experienced through intuition. Everything else we actually believe to be real is nothing more than a perception. An experience created by our mind.
Newton and Galileo, whom I believe are arguably the two most successful scientific discoverers to ever live, were both substantial practitioners of these intuitive and artistic methods mocked by a disconnected world we now live in. And, yes, they are arts rather than science. Because, while mathematical (science) or recognizable patterns may be involved, their application and interpretation are based substantially on intuition and a mystical interpretation of that intuition, ie creativity. Just as in art, these are expressions that are uniquely derived from the connected minds of their interpreter. In other words, in a world driven by an obsession with the bubble of quantitative analysis, we must be reminded that the world truly is qualitative.
My point with these introductory remarks is to lay the foundation for a greater awareness of the world around us. Part of that appreciation is a recognition that when it’s time, it’s time. The world does not wait. The cycle of our heart beat doesn’t wait to be told what to do, the cycle of gestation does not wait for us to tell it what to do, the cycle of the sun rising does not wait for us to tell it what to do, the cycle of seasons doesn’t wait for us to tell it what to do, and the cycle of time doesn’t wait on humanity to say its okay to continue. These and countless others are pre-determined cycles that could care less about what any lackey politician or corporate bureaucrat thinks or does. Control is but an illusion created by the ego. No one is going to control this cycle of volatility. No one is going to stop what is going to happen. It’s just that time. The only question is when and what will happen as the ego’s faulty perceptions and delusions of linearity (control) continue to be exposed. And the supposed “experts” and status quo who derive their beliefs and perceptions of expertise from linearity are found to be holding the bag.
Let’s move on to current financial markets. While I have never explained the significance of the 1995 pivot discussed on here quite a few times, mostly before the 2008 crash, it is integral to my remarks that the U.S. economy peaked around 1980-ish. And, it plays a key role in some of my analysis including the downside target I have on the S&P. This analysis is unique. There is no one else who uses 1995 as a key date in the analysis of financial or economic markets.
Below is a chart of the S&P 500 with the 1995 pivot being the start date for Fibonacci time zones overlaid in blue. Fibonacci time zones, as used below, are really nothing more than deconstructed patterns that define the universe, our galaxy and life on earth. A hurricane’s pattern, like that of the Milky Way, is defined by a Fibonacci pattern. It’s not a coincidence I have likened this crisis to a hurricane and that we have spent the time since the first wave of the storm, that hit in 2008, in the “calm” eye of the storm awaiting the back end to hit.
The fourth quarter of 2013 is clearly marked on the chart as a very important date. That date is backed up by much longer cycles that go back well over two hundred years and quite possibly a few thousand years. What will happen yet this year? We will just have to watch together. Maybe nothing. But global currencies, bonds and equities have already started to collapse this year in anticipation of what is yet to come. Something about 2013 is different.
Additionally, on the graphic is a long-term semi-logarithmic support line in red that has turned into a resistance line since the 2008 collapse. That resistance line has stalled upward price movements five times since the 2008 crash. Today, the market has marginally risen above that resistance line. Will the markets continue their upward linear move and stay above that line? Or is failure imminent? In rising above this resistance line, it has already created the left side of an abandoned baby candlestick pattern, the most ominous candlestick reversal sign.
Let’s now turn our attention to bonds. 2013 has been a target date for some years on here. That includes a possible target for a U.S. Treasury or debt crisis of some sort; likely a monetization or default as I have remarked. That date was arrived at substantially by long term astrological patterns. You are allowed to giggle here. Of course, you might want to temper that giggle because 2013 has produced the largest percentage Treasury market move since well before the 1982-to-present bull market in equities and Treasuries even started. In other words, something has now substantially changed with regards to debt and debt-based money for the first time in over 30 years. Five year Treasury rates have risen 200% off their lows this year. The ten year has made a very large move as well. Yet, to be fair, we have not seen a Treasury or debt crisis. But signs of something are starting to reveal themselves in 2013.
I suspect we aren’t yet done with rising interest rates around the world yet this year. As noted on the yellow band and upward arrow in the second chart below, it is plausible we are headed to 3.5-3.7% interest rates on ten year Treasuries. The downward arrow on the chart shows what could be a swift move to about 2.3% interest rates on the ten year Treasury before heading to 3.5-3.7%. Of course, there is a possibility we could head directly to 3.5-3.7% in coming months. Either way, I expect 2013 to print higher rates than we have right now as the global mini crash in bonds continues. Or, given the percentage move, maybe I shouldn’t call it a mini crash but just a crash in bonds around the world.
The U.S. government is expected to run out of money within a month or so without lifting the debt ceiling. Of course, we certainly expect the debt ceiling will be raised without a hitch. It always has been. It has always been linear. Well, that is, until it isn’t. Maybe 2013 will be that “it’s just time” as I have been projecting or maybe it won’t. We shall see. But, if we do get a debt/Treasury crisis of some sort, that means someone anticipated it years in advance. Not the only outcomes I have accurately anticipated. So, are you certain that life is defined by free will? Are the upcoming decisions as to whether to lift the debt ceiling really being made in this moment? Does anyone really know? Are some events and experiences pre-ordained? Remember, cycles don’t wait. Cycles, including many that affect our experiences, are pre-ordained and perceptions of control are just that.
A multitude of currencies around the world are now crashing against the dollar as are these country’s bond and equity markets. 2013 has definitely started a global wave of a repudiation of debt (government and corporate bonds) and that has moved us closer to my projection of a Treasury market or debt event this year. It’s important to appreciate what is happening with global bonds. Viewed another way, the dollar is rising violently against these currencies; the exact words I have been writing for years of what would eventually come to pass.
Federal Reserve tapering, were it to ever happen, and I have said many times that it never will because a service-based economy, aka a consumption-based economy, relies on endless money printing, will only hasten this trend towards currencies collapsing against the dollar.
Of course, we are already seeing a Federal Reserve tapering. Right this very moment. Not in the actions of the Federal Reserve but in the actions of the global economy. The global economy is no longer accepting Federal Reserve or other central banking stimulus. That is why currencies, bonds and equity markets are crashing around the world this year. There is no longer enough liquidity to drive these assets. And that lack of liquidity is because the world’s economy is drunk on too much stimulus and can’t imbibe any more. That means the global economy is weakening regardless of what central banks are doing. Central banking stimulus is tapering. Not because of the actions of central planners in central banks but because of the actions of untold tens of billions of uncontrollable moving parts around the world. Central banks cannot force entire economies, corporations or the world’s citizens to take on more debt or to increase spending. Be that in the U.S., Brazil, China, Europe or India.
People have been writing for years that China would eventually stop buying U.S. debt. As I noted numerous times, the U.S. and China were in what could be explained as a Nash Equilibrium. And that equilibrium would not be broken by China willfully choosing to stop purchasing U.S. debt. That would be suicide. It will happen because they will eventually be unable to afford to buy U.S. debt. As I noted half a dozen years ago, the day would come when countries, including China, can no longer afford to buy U.S. debt. Those days are now starting to expose themselves. With collapsing currencies and collapsing perceptions of financial asset wealth in nations around the world as their bonds and equities crash, the U.S. Treasury purchasing power of these nations is already substantially diminished. (And gold purchasing power as well is diminished too, as I noted would happen years ago; a note to the endless pumping of gold buffoons who believe BRIC nations will be an endless source of gold purchases as they believe the shiny metal will rocket to infinite. More linear thinking.)
This diminished Treasury purchasing power provides cover for the U.S. to possibly default selectively on foreign Treasury holdings. If countries are no longer able to purchase U.S. Treasuries, then the U.S. government can point to these actions as a reason why it is unable to continue to meet its financial obligations. Thus default. That default would have devastating effects on other countries while having little lasting impact on the U.S. or domestic bondholders. Frankly, while it would have substantial political implications, especially globally, it could have a net positive impact on the state of the U.S. economy and the U.S. ability to fund its government operations. That is just one possibility.
The crisis that is starting to reveal itself means many nation’s dollar-denominated current account surpluses are now being depleted as they start spending their accumulated dollars needed to keep their economies afloat. Unless we see a major pickup in global growth, these currencies will eventually be left to greater crises and the possibility of running out of dollars. Possibly even default. And that means, not only are they liquidating their dollar positions to deal with this crisis but at some point without recovery they must start to consider selling their gold to raise much-needed dollars. If this happens, it will put even more downward pressure on gold prices.
This global trade settlement system is likely to freeze up, seize up or fail in some substantial way before this cycle ends. As a result, we could easily see a global wave of famine headed our direction if, or as I have noted, when globalization collapses. It was just years ago that the idiots who created this mess were gloating about a world of unprecedented prosperity. How their perceptions and delusions have been exposed as ludicrous. And so have the perceptions and delusions of those who outsourced their thinking to them. I remember those words of unprecedented global prosperity exactly from the mouth of Hank Paulson when he was Treasury Secretary because I noted the hilarity of his ignorance on here at that time. Paulson is just another corporate bureaucrat whose success had absolutely nothing to do with competence but instead of being part of the class-based aristocratic club of corporate capitalism.
Of course, all of these moving parts no longer working in a predictable, linear fashion comes the mirage of corporate balance sheets being pummeled as American firms and the American aristocracy (the same has happened in countless countries around the world) have parked tens of trillions of dollars in other nation’s currencies or in supposed safe havens like gold. That money will, more than likely, be taking a dirt nap at some point. And if the world’s currencies are in crisis, what exactly will we all be purchasing from our corporate masters? Well, other than credit default swaps from Wall Street criminals.
Party on. The cycle of volatility remains in full force.