Revised 50 Year Plan for the Oligarchy to “Get it all!”

50 YEAR PLAN FOR THE TOP TENTH OF ONE PERCENT, ‘TO GET IT ALL

I believe that some of the Elite’s (oligarchy).01% have a 50 year plan, to get all the money to them, at the top. I will hereafter refer to this group simply and fictionally as El (the first two letters of elite), as though it is a single person.  Ancient deities known as EL include the supreme god of the Canaanite and  the Mesopotamian Semites who worship the ‘material world’ over the ‘spiritual’ and has the Bull as its symbol of God (Wall Street?)!  According to the El’s 50 year plan, there is to be new era of great decline in economic equality, where the poor get poorer and ‘the oligarchy’ turns into a ‘kleptocracy’ and take it all.

Phase l: The project began in 1968 under President Johnson and later Nixon administration’s by eliminating gold as a backing for the dollar and for floating world currencies, which has now gotten the price of gold from $35 an ounce to above $1,200 an ounce. As the average citizen doesn’t hold gold, only El’s group has benefited. In the 1980’s El and his allies on Wall Street, got to help commercial banks by eliminating the competition of the Savings and Loan industry. They did that purposely by selling the S&L’s junk bonds, which became worthless; causing the S&L’s to go bankrupt. To further help the commercial banks, El and the Wall Street group got ‘branch banking’ approved, so that now banks are as convenient as your local coffee shop.  Before branch banking, deposits were held in thousands of small local banks. Now, only 10 banks control some 50% of total deposits.

El’s plan has also worked to eliminate company Pension Plans and substitute a privatization plan for retirement, based on stock market performance. Except for municipalities, company pension plans are now toast and the private 401K retirement plans are the only alternative. This has taken the burden and expense of retirement off the corporate books and according to the plan, the public now associates their success with ‘Corporate America’.  Also according to plan, America’s corporations have become international entities, having no loyalty to their country or their workers and have priorities only for their officers, with CEO salaries 500 times the average worker. They are hoarding cash and profits and buying their own stock back, rather than expanding their business.  If corporations were people, they would be called sociopaths, which are only interested in their own gratification. On occasion corporations merge with each other, making huge buy-out profits for it officers, while reducing employees and creating more powerful and influential international corporations.  El’s plan is for individuals to be basically only investing their retirement funds through mutual funds, which the banks now control.  Small brokerage firms have been eliminated and the financial industry is controlled by Wall Street’s large banks.

As planned and with the help of President Clinton, El’s Wall Street group in 1999 eliminated the Glass Steagall Act that separated banks from investment banks. The 2007 plan; was to get  individuals equity out of their homes and into El’s groups pockets was very successful.  The banks liberalized their home loan policy, under a subterfuge of helping everyone to own homes, which in reality, they really couldn’t afford. Then Investment Bankers packaged these mortgages into worthless CMO’s securities and sold them to their clients and in anticipation of a Real Estate market collapse, and at the same time shorted these securities in their corporate account.  In addition, at the same time, they made profits and fees from mortgages they wrote and securities they packaged.  You say there should be a law against this outrageous breach of trust? There was. The law was called the Glass Steagall Act which the Clinton Administration eliminated. This unethical strategy, because of the bad loans, eventually put the commercial bank’s balance sheets in trouble. However, as El had planned, the Obama Administration would not allow the banks to fail, as they are ‘too big to fail’ (and too big to jail), and put the burden for their relief on tax payers, further weakling the Middle Class.

Phase ll: Today, with the stock market at new highs above 26,000 Dow, the stage is set for Phase ll of El’s plan to take all chips. The public is heavily invested in the stock market under ‘Wall Street’s’ and the financial Industries’ motto, ‘Holding for the long run, always works out.’ Trained like ‘Pavlov’s Dog,’ investors have full confidence in the stock market and its recovery attributes and the advantages of mutual funds.

The middle class continues to take it on the chin. According to recent data between 2000 and 2017, the middle class shrunk from 55% to under 50%. An economy based on consumer spending of the middle class, like the United States, cannot grow without a healthy middle-class. International corporations do well for a while, as they are now. But eventually, I feel the present economic environment may lead to a deflationary economy, which will hurt all economic levels. If commodity prices and companies engaged in retail sales continue to suffer, their bonds will eventually suffer and therefore the banks that are holding securities will suffer. (See below under My Concerns)

El’s Phase Three, (The Black Hole) In the not too distant future: 1) All classes except the oligarchy will disappear in the next financial crisis, sometime after 2019. Congress, this time, will not bailout the banks, as conservative Republicans will reject any government sponsored program. Also, without any strict regulations, the banks will be so deeply in trouble with non-collectable loans and some $350 trillion in derivatives outstanding, that a bailout this time, will be impossible. The banks will close. The New York Stock Exchange will close. All functions of government in the United States will cease to exist, except for payment interest on their debt, the police and national defense. The only ones that will have any money (return on government bonds) and power will be the oligarchy. Class warfare will at last come to an end, as the oligarchy will dominate. 2) All national governments worldwide will fail. The oligarchy will then be composed of approximately 2000 selected families worldwide and their Corporations will rule the world without borders. Approximately 2,000 families will hold their estates in walled castles, protected by a paid army. 3) All land and businesses in the world will be owned and ruled by the oligarchy. 4) Most people will be unemployed and uneducated. All those, because of their needed skills, that will have a job will be corporate employees and will be designated as serfs or slaves. Genetic engineered embryos will be available only to the oligarchy, assuring them the brightest and healthiest children. 5) Law order will prevail. 6) The oligarchy will eventually move away from earth to either ‘sky lab type 2001 Space Odyssey satellites,’ or when it becomes possible, to the moon or Mars. The earth and its multitudes are destined perish in pollution, drought and rising seas. This scenario obviously has to be stopped.

MY CONCERNS

I really don’t believe Phase lll and the ‘Black Hole’ will happen. I am to much of an optimist and I still have faith in the majority of the American people will not let it happen. However, unless we can make changes on the short term, the stage seems to be set for chaos to once again rule. I don’t know from where and I don’t know when, but whatever it is, it will probably come as a surprise. Maybe it will happen from the surprise effect of early global warming or a surprise China collapse. Unless we make changes now, I believe that the stage is set for a financial crisis surprise and the average investor has little options to protect themselves.  Of course everyone is now in the stock market; you can’t get a decent return anywhere else. Of course everyone is now in mutual funds; it is the most practical way to invest. For El, it is like feeding anchovies to the sharks.

Maybe our weakness is China? George Soros has just been recently quoted as saying, “China has a major adjustment problem. I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”  China continues to show lackluster economic growth. China’s rate of loans is far above the rate of money supply growth. China’s debt is 2.5 times its GDP. China is using its currency to buy as many companies in the West as it can, while it can. Just as has happened to Japan in the 1990’s, I expect the same deflationary scenario to begin to occur in China.

The Chinese currency has dropped to its lowest level in many years. Possible tariffs could toss China into a recession where growth is already slowing. China’s banks have given loans to questionable companies as $1.3 trillion of corporate loans are owned by companies were profits will not cover their interest payments. The rating agencies think everything is fine. However, remember these very same agencies rated worthless CMO’s in 1968 as AAA. The problem in China could trigger banks losses that could start a worldwide recession. Money is flowing out of China. Tariffs will increase the problem. While some manufacturing jobs may come back to the US as a result of the tariffs, more jobs domestically may be lost, because the average American would have less spending power. The Peterson Institute for International Economics estimated that rather than bringing back jobs,  Trump’s proposed tariffs could ‘result in a trade war and cost our economy more than 5 million jobs and possibly lead to a recession’.

I believe China is a ‘paper tiger’ that is not as big or as strong as it appears and is hampered by cronyism and corruption. Although China has a supposed $375 billion trade deficit with us, the actual figure is much smaller. For example, the export value given to the Apple X iphone is $378. China contributes only $14 of the total cost for assembly while the rest of the cost is run through supply chains in the US and the rest of the world. Our trade balance ignores the value created by other countries that have preceded China in the chain. Tariffs may kill more jobs than it saves. In fact The Foreign Policy Association estimates that one dollar spent on Chinese imports is about 75 cents that goes into the US economy and that every job created in the metal industry through tariffs, would eliminate 16 jobs in other industries.

China doesn’t even believe its own statistics, as China’s provinces are growing faster than the whole. The China inflation rate is a government secret as they print money indiscriminately to bolster its shaky growth figures. Our Federal Reserve estimates that the US net worth is $60 trillion larger than China and yet, China’s money supply is estimated to be 75% larger than the US.

With 20% of the world’s population they have only 8% of the world’s arable land and 10% of that is reported to be polluted. Coal still provides 70% of China’s power creating 16 of the world’s most polluted cities. About 435 of China’s 660 large cities are suffering from severe water depletion. I fear China not because of its competition, but because of its vulnerability and possible effect on an upcoming economic crisis.

My greatest fear in this country is that America will be turned into an oligarchy and then into a kleptocracy, similar to Russia. In a recent (Oct 22, 2016) Economist Magazine they describe Putin’s domestic policy to reduce competition to favor his oligarchs. They describe a system he developed which Kirll Rogov, a Russian political economist describes as “soft legal constraints.” To quote from the Economist Magazine, “It involves writing the rules in such a way that to observe them is either prohibitively expensive or downright impossible to follow, then handing out licenses to break those rules to the oligarchy.” Doesn’t this sound exactly like what has happened in our financial industry? The SEC and FINRA have made the rules (compliance) to run an independent brokerage firm as either prohibitively expensive or downright impossible to follow. In this way, the government has eliminated independent competition and has turned over the entire financial industry over to the banks and large financial institutions. They allow Wall Street to break the rules for the cost of a small fine, as compared to the large profit that they made in breaking the rules. In this way the large financial institutions feed the SEC, that guards their monopoly.

In my opinion, the Trump presidency is functioning without restraints within his administration or from the Republican Party. This is causing the United States  to look more and more like Putin’s Russia oligarchy and its economy, dominated by the privileged few 400 families (top tenth of 1%). My fear is that like Russia, we are quickly becoming a  Kleptocracy  (from Greek κλέπτης kléptēs, “thief”, κλέπτω kléptō, “I steal”, and -κρατία –kratía from κράτος krátos, “power, rule”) is a government with corrupt leaders (kleptocrats) that use their power to exploit the people and natural resources in order to extend their personal wealth and political powers.

The slowing of growth in the US could have significant political implication, as President Trump’s popularity depends significantly on economic prosperity The effect of the $1.5 trillion tax cut will be temporary. The first half GDP growth for 2018 was 3.2%. However, forecasts call for the full year GDP growth at only 3.2% and 2019 GDP +2.1% and 2020 GDP + only 1.9%!. Recent surveys have indicated that Trump’s base indicates that as long as the economy is doing well, they care little about the president’s lies (8500+ and counting) or his misogyny, or his obstruction of justice, or his racism or his denial of global warming or his preferential treatment of autocratic leaders, or his lack of empathy for equal upward mobility, or his separation of children from their parents, or his negation of NATO, or that his ‘swamp’ is full admitted law breakers, incompetents and temporary acting executives for the masses of administrators who have quit or resigned,, or his lack of concern about anything except his own personal business interests and his popularity.

So far, Trump’s base is holding. However, I fear what will happen if his base starts to fade. Will a crisis occur, as happened to Hither, when terrorists (or he) burned down the Berlin capital the Reichstag building? Although Hitler only had 30% of the vote, he used the terrorist attack to take over the government under ‘temporary’ emergency powers, because of a national emergency. The scary thing about the Hitler take over is that it was approved and made possible by the Christian Democrats, which we now call Evangelistic Christians. It ‘can’ happen here! I have devoted myself to make sure that Enlightenment prevails over the dark side of chaos. As the Founding Fathers did in The Declaration of Independence,  fifty-six men declared their commitment to the “self-evident truths” that formed the foundation of our nation and which have continued to serve as a beacon of hope for all people around the world who have yearned to be free, I pledge my life, my fortune and my sacred honor.

‘Sacred honor,’ were befittingly the last words of this declaration. We are living through a moment in history where honor is no longer assumed. The President has smashed through our established norms for honor. This has resulted in people assuming they have permission to say things that are rude, raciest, misogynistic, homophobic and just plain uncivil. A small group of people are trying to shift the norms of our social climate to one that is not acceptable to the majority. Civility is kept in balance with accountability and virtue. It is ‘self evident’ that we are able to tell the difference between what is right and what is unethical. If we lose this battle, we have lost the war!

It was George Orwell book of  ‘1984′ fame who said: “Anyone who challenges the prevailing authority, can find himself suddenly silenced.” (Giordano Bruno burnt at the stake in 1600 for saying the earth revolves around the sun). There has been a major effort to silence me! I got ‘barred’ after appealing a minor $25,000 fine and 90 day suspension. I lost my business, my largest asset, my retirement from 12b1 fees and my reputation. I also lost my access to being quoted (once a month) by such media as The Wall Street Journal, Barron’s Magazine and Reuters international News service. I found out a little to late, that ‘Due Process’ at the SEC, is not tolerated. And just recently my bank JP Morgan, canceled all my accounts and my charge cards.

Faced with this tyranny and censorship, it is important to still speak out.

CARL

How many times can a man turn his head
And pretend that he just doesn’t see?
The answer, my friend, is blowing in the wind
The answer is blowing in the wind

How many times must a man look up
Before he can see the sky?
How many ears must one man have
Before he can hear people cry?

How many deaths will it take till he knows
That too many people have died?
The answer, my friend, is blowing in the wind
The answer is blowing in the wind

SUNG BY Peter, Paul & Mary – Lyrics Bob Dylan

Kleptocracy  AT THE MOVIES! 

“I can only hope that Phase lll, never happens here. However, what is happening now,  reminds me of a three science fiction movies!!!

Rollerball. 1975 movie called Rollerball. It stars James Caan as the sports hero Jonathan, Maude Adams as his ex-wife and John Houseman as Mr. Bartholomew, a high-level executive of the Energy Corporation. The film takes place in 2018, where the word is run as a global corporate state. The Energy Corporation is a global energy monopoly based in Houston, which controls access to all transportation, housing, communication and food on a global basis. Energy Corporation sponsors Jonathan’s team. Jonathan’s wife, Maud Adams was taken away from Jonathan by a corporate executive, which simply exerted his power and took her. The game Rollerball is a substitute for all team sports and for warfare. It is designed to bring euphoria to the masses. While the purpose of the sport is entertainment, Mr. Bartholomew, describes it as having a “distinct social purpose”: to show the futility of individual effort. In order to defeat the individual star Jonathan, The Energy Corporation simply changes the rules, so that Rollerball soon degrades into senseless violence, which nullifies any individual effort with humiliation. In the movie Jonathan emerges victorious against the Big Corporation.  This seems unlikely!”

Handmaid’s Tale, a 1985 book and now a TV Special, The Handmaid’s Tale, a work of  fiction by Canadian author Margaret Atwood. The novel is set in a near-future in New England, in a totalitarian theocracy, which has overthrown the United States government. The Handmaid’s Tale is set in the Republic of Gilead, a theocratic military dictatorship formed within the borders of what was formerly the United States of America. It begins with a staged attack that kills the President and most of Congress with a Christian fundamentalist revolutionary uprising, called the “Sons of Jacob”.   The revolution suspends the United States Constitution, under the pretext of restoring order. The new regime, the Republic of Gilead, forms a new militarized hierarchical regime, based on Old Testament-inspired social and religious fanaticism, which creates newly created social classes, with only the elite ruling. In this society, human rights are severely limited and women’s rights are even more curtailed, as women are forbidden to read. The story is told in the first person by a woman called Offred. The character is one of a class of women kept by the ruling class for reproductive purposes and known as ‘handmaids’.”

Elysium. The 2013 film offers deliberate social commentary, which explores political and sociological themes such as immigration, overpopulationhealth careworker exploitation, the justice system, and social class issues. In 2154, Earth  most of the earth’s citizens live in poverty, on the edge of starvation, and with little technology and medical care. The rich and powerful live on Elysium — a gigantic space habitat located in Earth’s orbit. Elysium is technologically advanced with some of its technology including Med-Bays: medical machines that can cure all diseases, reverse the aging process, and regenerate new body parts. A long-running feud exists between the wealthy residents of Elysium and the citizens of Earth. The earth and its multitudes are destined to perish in pollution, drought and rising seas.”

Kleptocracy  in Books:

What also come to mind is the book Brave New World  by  Aldous Huxley. Published in 1932, it proposes that economic chaos and unemployment will cause a radical reaction in the form of an international scientific empire that manufactures its citizens in the laboratory on a eugenic basis, without the need for human intercourse. The World State is built upon the principles of Henry Ford‘s assembly line: mass production, homogeneity, predictability, and consumption of disposable consumer goods. While the World State lacks any supernatural-based religions, Ford himself is revered as the creator of their society but not as a deity, and characters celebrate Ford Day and swear oaths by his name (e.g., “By Ford!”). The novel’s Gregorian calendar year is AD 2540, but it is referred to in the book as AF 632 (2,560 AD)

From birth, members of every class are indoctrinated by recorded voices repeating slogans while they sleep (called “hypnopædia” in the book) to believe their own class is superior, but that the other classes perform needed functions. Any residual unhappiness is resolved by his society’s methods of keeping its citizens peaceful, which includes their constant consumption of a soothing drug called soma. This books relevance to today is the drinking of the common ‘kool-aide’ of Corporate indoctrination “If it good for the corporation it must be good for the nation’ Formerly ‘What’s good for General Motors is good for the country. The common good has fallen away to ‘winners take all’ attitude. Governments are protecting the privileged and the rest are considered outsiders.

The biological techniques used to control the populace in Brave New World did not include genetic engineering, because Huxley book was written before the structure of DNA was known. However, Hitler’s ‘master race’ is definitely implied. Now the upper class can promote their children’s future through superior education and personal contacts. However, soon if you can afford it, why not enhance the embryo of your children to produce the brightest and healthiest children using genetically engineering? Domination by blond and blue eyed Arians of Hitler’s perfect child can now be achieved.

As long as I’m at it we can’t forget 1984 by George Orwell. In 1984, London is a grim city in the totalitarian state of Oceania where Big Brother is always watching you and the Thought Police can practically read your mind. Winston Smith is a man in grave danger for the simple reason that his memory still functions. Drawn into a forbidden love affair, Winston finds the courage to join a secret revolutionary organization called The Brotherhood, dedicated to the destruction of the Party. Together with his beloved Julia, he hazards his life in a deadly match against the powers that be.

T he class hierarchy of Oceania has three levels:

  • (I) the upper-class Inner Party, the elite ruling minority, who make up 2% of the population.
  • (II) the middle-class Outer Party, who make up 13% of the population.
  • (III) the lower-class Proletariat, who make up 85% of the population and represent the uneducated working class.

As the government, the Party controls the population with four ministries:

  • The Ministry of Peacedeals with war and defense.
  • The Ministry of Plentydeals with economic affairs (rationing and starvation).
  • The Ministry of Lovedeals with law and order (torture and brainwashing).
  • The Ministry of Truthdeals with news, entertainment, education and art (propaganda).
  • The Thought Police  stamps out anyone who does not fully conform to their regime and constant surveillance, through devices such as (Telescreens two-way televisions. (Watch out for Google ‘Alexia’)

Nineteen Eighty-Four popularized the adjective Orwellian, which describes official deception, secret surveillance, brazenly misleading terminology, and manipulation of recorded history by a totalitarian or authoritarian state.

There are some similarities between now and 1984:  1) The US has been in constant war since 1776 (except for 36 years). 2) After some 8000 lies of president Trump, documented by the New York Times ‘alternative truth’ has entered our vocabulary. 2+2 does not equal 5 as Winston Smith finally believed! 3) China, Russia, North Korea and the Saudi Arabia (remember the oil embargo) are now our friends and Canada, France and the rest of G6 are now our enemies. 4) With Presidential authoritarianism and worldwide fascism, George Orwell’s 1984 is taking on a new life with extraordinary relevance and renewed popularity. 5) The class hierarchy of 1984 of 2% upper, 13% Middle and 85% poor is becoming a reality. Though the year 1984 now exists in the past, Orwell’s novel remains an urgent call for the individual willing to speak truth to power. “Orwell saw, to his credit, that the act of falsifying reality is only secondarily a way of changing perceptions. It is, above all, a way of asserting power.”—The New Yorker

These fictional stories tell ‘what lies beneath’ the psyche of humanities worst traits. ―Quotes George Orwell1984. “Who controls the past controls the future. Who controls the present controls the past.”  And, “If you want a vision of the future, imagine a boot stamping on a human face – forever”

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

updated 4/11/2019

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ISL #724 REVISED

Dow close to breaking into new record high!

Revise Letter #724

THE ECONOMIC OUTLOOK REVISED

2018 first Half GDP +3.4%

2018 full year +2.9%

2019 GDP NOW +2.1%   

2020 GDP Now +1.9%  

THE EGG HAS A CRACK!

NEW BOOK 

Shortest Way Home by Pete Buttigieg 

IF YOU WANT TO BE INSPIRED AND HAVE RENEWED HOPE, READ THIS BOOK

BORN IN 1982, WENT TO HARVARD, SERVED IN AFGHANISTAN AND IS SENSIBLY PROGRESSIVE. HE WILL SURPRIZE YOU!

 

ISL # 724 AS PREVIOUSLY PUBLISHED

The Dow Industrial Average is up 17% since November and is close to breaking above its all-time high of 26,828 set October 3, 2018 by breaking above it previous high set January 26, 2018 at 26,616. However, economic growth appears to be slowing.

THE CONFERENCE BOARD ECONOMIC OUTLOOK, 2018-2019
Percentage change, seasonally adjusted annual rates (except where noted)

 

  2018 2019 2018 2019 2020
  1st
half
III
Q*
IV
Q
I
Q
 II
Q
2nd
Half
ANNUAL ANNUAL ANNUAL
Real
GDP
3.2 3.4 2.4 2.6 2.5 2.2 2.9 2.7 2.2
Real
Consumer
Spending
2.2 3.5 3.1 2.5 2.6 2.4 2.7 2.8 2.4
Residential
Investment
-2.4 -3.5 0.0 0.5 0.7 1.0 0.0 -0.1 1.4
Real
Capital
Spending
10.1 2.5 4.0 4.1 4.5 4.9 6.8 4.4 4.8
Exports 6.4 -4.9 4.1 3.8 3.6 3.7 4.1 3.0 3.7

 

Prosperity and the Political implications.

In particular, growth for exports at 3.7% in 2020 is questionable, depending upon how the China negotiations work out. (More below) Republicans are touting how great the economy is doing. However, the economic blast from the recent tax cuts to the rich, that caused a $2 trillion dollar increase to our debt and the 2018 budget deficit of $779 billion, have only had a temporary effect. GDP growth in 2019 is forecast as up only 2.7% and 2020 up a measly 2.2%.

This slowing of growth could have significant political implications as President Trump’s popularity depends significantly on economic prosperity. Recent surveys have indicated that Trump’s base indicates that as long as the economy is doing well, they care little about the president’s lies (8500+ and counting) or his misogyny, or his obstruction of justice, or his racism or his denial of global warming or his preferential treatment of autocratic leaders, or his lack of empathy for equal upward mobility, or his separation of children from their parents, or his negation of NATO, or that his ‘swamp’ is full admitted law breakers and incompetents, or his lack of concern about anything except his own personal business interests and his popularity. Just as virtues reward, is virtue itself (Spinoza), vice and moral derogation have consequences for those that are complicit.

According to a recent Pew Research report, the United States, as ranked against other nations, is 36th in health care, 44th in math scores, 39th in basic education, 34th in access to clean water, 35th in meeting basic human needs, has the highest first day infant mortality rate and the highest child poverty rate at 21% among industrialized nations.  That’s one in every five of our children living in poverty!  As great nation, we must be better than that.

For me, it all comes down to this question; Is it human nature for us to be virtuous, kind and fair for the common good by seeking pluralistic solutions through a democratic process OR Is it human nature for us to be emotionally swayed by our greed and prejudices and to deliver our power and trust to an autocratic government of a demagogue? The battle for the hearts, minds and votes of the public continues as I speak.

As Bob Dillon sang, “The battle outside is raging! It’ll rattle your windows.  And shake down your walls. For the times they are a changing! And maybe this time, because of populism, things may not be a changing for the better! To quote from Nietzsche “The love of power is the demon of men. Let them have everything – yet the demon waits and waits and will be satisfied.” Or as the Pogo cartoon says; “We have seen the enemy and it is us!”

China

The Chinese currency has dropped to its lowest level in many years. Possible tariffs could toss China into a recession where growth is already slowing. China’s banks have given loans to questionable companies as $1.3 trillion of corporate loans are owned by companies were profits will not cover their interest payments. The problem in China could trigger banks losses that could start a worldwide recession. Money is flowing out of China. Tariffs will increase the problem. While some manufacturing jobs may come back to the US as a result of the tariffs, more jobs domestically may be lost, because the average American would have less spending power. The Peterson Institute for International Economics estimated that rather than bringing back jobs, Mister Trumps, tariffs could ‘result in a trade war and cost our economy more than 5 million jobs and possibly lead to a recession’.

I believe China is a ‘paper tiger’ that is not as big or as strong as it appears and is hampered by cronyism and corruption. Although China has a supposed $375 billion trade deficit with us, the actual figure is much smaller. For example, the export value give to the Apple X i-phone is $378. China contributes only $14 of the total cost for assembly while the rest of the cost is run through supply chains in the US and the rest of the world. Our trade balance ignores the value created by other countries that have preceded China in the chain. Tariffs may kill more jobs than it saves. In fact The Foreign Policy Association estimates that one dollar spent on Chinese imports is about 75 cents that goes into the US economy and that every job created in the metal industry through tariffs, would eliminate 16 jobs in other industries.

China doesn’t even believe its own statistics, as China’s providences are growing faster than the whole. The China inflation rate is a government secret as they print money indiscriminately to bolster its shaky growth figures. Our Federal Reserve estimates that the US net worth is $60 trillion larger than China and yet, China’s money supply is estimated to be 75% LARGER THAN THE US.

With 20% of the world’s population they have only 8% of the world’s arable land and 10% of that is reported to be polluted. Coal still provides 70% of China’s power creating 16 of the worlds most polluted cities. About 435 of China’s 660 large cities are suffering from severe water depletion.

I fear China not because of its competition, but because of its vulnerability and possible effect on an upcoming economic crisis.

Kleptocracy (from Greek κλέπτης kléptēs, “thief”, κλέπτω kléptō, “I steal”, and -κρατία –kratía from κράτος krátos, “power, rule”) is a government with corrupt leaders (kleptocrats) that use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political powers.

Carl M. Birkelbach

More Books

Kleptocracy (from Greek κλέπτης kléptēs, “thief”, κλέπτω kléptō, “I steal”, and -κρατία –kratía from κράτος krátos, “power, rule”) is a government with corrupt leaders (kleptocrats) that use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political powers.

New Books;

Truth in our Times by David E McCabe The New York Times lawyer says it all with his subtille: Inside the fight for Press Freedom in the age of Alternative Facts. As the Peresident tries to surpress critical voices of  our long established First Amendment rights, this book speaks out. (while it can)

Truth in our Times by David E McCabe The New York Times lawyer says it all with his subtille: Inside the fight for Press Freedom in the age of Alternative Facts. As the Peresident tries to surpress critical voices of  our long established First Amendment rights, this book speaks out. (while it can)

The Threat by Andrew McCabe. Written by the former FBI diector after Come. Writes “Trump has shown that he does not know what domocracy means. He takes no action to protct it.” The warnings are familiar.

The University of Oxford just predicted that 47% of all US jobs are at risk of being replaced by robuts and artificial intelligence in 15 years.

The Robuts are Comming by Andres Oppenheimer. sub-titled; The Future of Jobs in the Age of Automation. The last time an Oppenheimer had a message for us, it was as explosive and as devestaying as this forcast.

The Globotics Upheval: by Rus Belt Just kidding! by Richard Baldwin. Sub-titled: Globalization, Robotics and the Future World. Algorithms will also take ove whit-coloar jobs.

Rise of Robuts by Martin Ford. sub tiltled Technology and the Threat of a Jobles Future. He says, when the employment appocaplice comes, it will happen so fast that workers wont have no time to adjust.

Okay! I don’t know what to worry about 1st, the end of democracy, New York under water because of ‘global warming’ or the comming of a dystopia civilization led by the robuts. There are some advantages of being 79!

Recent Important Books:

Democracy in Chains by Nancy MacLean explains in detail of how the Koch brothers and the Mercers are executing  a plan to divide the US through our fear of multiculturalism and racial differences.With the fall of the Berlin wall in 1991 and the end of the Soviet Union, the consensus though in the US was that capitalism and the western concept of the market place had won. As last, humanity was moving toward the “Omega Point’ of philosopher/monk Pierre Teilhard de Chardin where enlightenment, reason and civility would prevail. Instead, we face which seems like an endless cycle of greed, inequality, dishonesty, bigotry, intolerance, theocracy and authoritarianism. The harmful side effects of successful capitalism and globalization have created distress on workers, who find themselves increasingly replaced with automation and lower priced labor.

While some of these problems are systemic, there are two outside influences that have conspired to change our governing process. 1) One side comes from the far-left of the Koch brothers and their Cato Institute and the Mercer family and their now defunct Cambridge Analytic and their associates that have plans to subvert the will of the democratic majority and tilt the playing field forever in favor of the rich and powerful. 2) The other influence comes from the totalitarianism and the oligarchy of Russia and other authoritarian governments that are leaning to the far right, where fascism is winning over individualism and equality. Everything Russia does is to undermine Western structures and government, so their form of government of gross inequality appears preferable to their people. Russia’s Putin has hacked our bank accounts, undermined our media with fake news and influence our elections. Whether we know it or not, our country is under attack.

Fear by Bob Woodward. New Yorker Magazine said about the book, ‘The real crime is already in plain sight” Democracy is getting crushed and the ultimate outcome, unlike Nixon, will not be pretty.The Road to Unfreedom by Robert Snyder which explains how Putin is executing a plan to have us loose faith in our institutions ( the Presidency, the rule of law, NATO, NAFTA, the safety of our identity and our financial information) though cyber attacks. Can Democracy Survive Global Capitalism by Robert Kuttner describes how Fascism is winning throughout the world and how the US oligarchy and corporations have captured the machinery of the government to promote it. and  Yes we still Can by Dan Pheiffer, tells a story of Russia and Trump influencing the Republican Party for an upcoming constitutional crisis. War vs Peace by Ronan Farrow:that tell s how diplomacy of the state department is being replaced by military policy; Us vs Them by Ian Bremmer: tells how we are being distracted from solutions of automation and globalization by political rhetoric.  Tailspin by Steven Brill how the aristocracy and oligarchy are perpetuating a take it all attitude, that will make our economic system dis-functional. A novel: Ready Player One by Ernest Cline that presents a virtual reality world of the future. Evicted:Poverty and Profit in the America City by Matthew Desmond;6,000 people are evicted every day! How Democracies Die by Steven Levitsky; How we are headed for a economic and political disaster.The Common Good by Robert Reich, an attempt to see the value of a progressive political policy to solve inequality.

Three books that I have  read with a positive attitude:Hope in the Dark by Rebecca Solnit;Talks about maintaining a positive mental attitude. Enlightenment Now by Steven Pinker tells about how the macro world is a much better place than ever before.and The Soul of America by Jon Meacham; While the American story has not always—or even often—been heroic, we have been sustained by a belief in progress even in the gloomiest of times., “The good news is that we have come through such darkness before”—as, time and again, Lincoln’s better angels have found a way to prevail. I doubt it, but lets pray for solutions. I believe the world is now at a tipping point and is moving toward  destruction (nuclear or autocratic oligarchy).

More Books:

  • The Age of Stagnation by Satvajit Das. This book explains the failures of central banks to stop an economic and financial catastrophe. His solution is austerity, which seems unlikely to happen
  • The Only Game in Town by El-Erain. He believes that central banks cannot avoid a financial catastrophe with monetary policy alone and needs fiscal policy to aid the economy. With Republican Congress, this does not seem possible.
  • Dark Money and the rise of the radical right, by Jane Mayer. This book explains how economic growth is unsustainable if eighty people own 50% of the world’s wealth and 1% of people own more than the 90% of wealth in the US. (dah!)
  • The Fourth Industrial Revolution by Klaus Schwab. This book shows what a wonderful world of technological wonders awaiting us once we get through this economic and financial catastrophe. EVENTUALLY, the only problem is, once Artificial Intelligence has access to unlimited knowledge in the cloud and is able to reproduce itself, silicon based intelligence will not need carbon based intelligence The next step in evolution?. However, that’s a problem for another day.
  • Don’t’ forget the classic THIS TIME ITS DIFFERENT by Carmen Reinhart: It tells the story of eight centuries of Financial Folly. Each time after a catastrophe, such as the Great Depression or 2008, economists agree that it could never happen again. Who could be so stupid as to let six banks control 70% of the US assets (to big to fail) and allow all the economic growth to go to the 1%, while eighty people own 50% of the world’s wealth? NAH!
  • THE END OF ALCHEMY  Mervin King, the former governor of the Bank of England argues that, 7 years after the worst economic crisis since the Great Depression, “nothing fundamental has changed.” Most academic and media narratives, he writes, focus on symptoms, of swelling personal debt, the housing bubble, misdeeds of banks. However, the underlying PROBLEM is a system of banking greed to convert risk-less deposits into long-term risky investments (loans to oil companies for example, See below), all the while assuring depositors that they can redeem their money at any time. King points out that, in the 19th and 20th centuries, banking crisis’s occurred almost once a decade. Preventing the next one “requires radical reforms”  including obliging major banks to maintain enough equity to stay losses without taxpayer support.
  • HOMO DEUS Yuval Noah Harari, author.“There was a time when the oligarchy needed the public to fight their wars, to manufacture their goods, produce their food and buy their products. That time is quickly coming to an end. Wars can no longer be fought on either a conventional or a nuclear basis. Wars are too expensive, impractical and are dangerous to all. Manufacturing of goods and food can now be done by a few, with automation. The oligarchy no longer needs the public to buy its goods, as it is completely independently wealthy. It will no longer be to our advantage to serve the common good. Over the past century humankind has managed to do the impossible and rein in famine, plague, and war. This may seem hard to accept, but, as Harari explains in his trademark style—thorough, yet riveting—famine, plague and war have been transformed from incomprehensible and uncontrollable forces of nature into manageable challenges. For the first time ever, more people die from eating too much than from eating too little; more people die from old age than from infectious diseases; and more people commit suicide than are killed by soldiers, terrorists and criminals put together. The average American is a thousand times more likely to die from binging at McDonalds than from being blown up by Al Qaeda.What then will replace famine, plague, and war at the top of the human agenda? As the self-made gods of planet earth, what destinies will we set ourselves, and which quests will we undertake? Homo Deus explores the projects, dreams and nightmares that will shape the twenty-first century—from overcoming death to creating artificial life. It asks the fundamental questions: Where do we go from here? And how will we protect this fragile world from our own destructive powers? This is the next stage of evolution.
  • THE CRISIS OF THE MIDDLE CLASS CONSTITUTION. Why economic inequality threatens our republic. For most of Western history, Sitaraman argues, constitutional thinkers assumed economic inequality was inevitable and inescapable—and they designed governments to prevent class divisions from spilling over into class warfare. The American Constitution is different. Compared to Europe and the ancient world, America was a society of almost unprecedented economic equality, and the founding generation saw this equality as essential for the preservation of America’s republic. Over the next two centuries, generations of Americans fought to sustain the economic preconditions for our constitutional system. But today, with economic and political inequality on the rise, Sitaraman says Americans face a choice: Will we accept rising economic inequality and risk oligarchy or will we rebuild the middle class and reclaim our republic? The Crisis of the Middle-Class Constitution is a tour de force of history, philosophy, law, and politics. It makes a compelling case that inequality is more than just a moral or economic problem; it threatens the very core of our constitutional system.
  •  The Vanishing American Adult. By Nebraska Republican Senator Benjamin Sasse.Senator Sasse earned a doctorate in history and before his election in 2014 he was a federal health official and president of Midland University, which is linked with the evangelistic Lutheran Church. He is a conservative Republican who refused to back Trump.  The Senator was critical of trumps recent firing of FBI director James Coley. His new book is subtitled, ‘Our coming of age crisis and how to rebuild a cultural of self-reliance’, grows out of his experience as a parent of the three children he raises with his wife in Melissa Nebraska. In an interview on and NPR radio, he said they shipped their kids to farms and ranches in Nebraska to learn some big life lessons. He said he wants them to get dirt under their fingernails. He says these experiences will help build scar tissue for the sole. He thinks we are doing a bad job of helping our children to understand that they have to develop resiliency. He said preserving and getting through hardships makes you tough. He said that we are failing and a bunch of fundamental ways to distinguish for our children between ‘needs’ and ‘wants’ and are failing to distinguish between ‘production’ and ‘consumption’. He said this book is not an old man screaming get off my lawn! It is a question of how do we do better or please Work on my Lawn. He thinks the category of perpetual adolescents is a new thing and is dangerous. Adolescence he says is about intentionally transforming from childhood into adulthood. Being stuck in adolescence is a Peter Pan to dystopia, as children forget that Neverland is a bad place to be.  He believes it is a good thing for children to learn how to work and to help them find meaning in their work. He states, that it is not natural to have to suffer when we work as we are made to be productive and yet the worlds we live in has a whole bunch of suffering. And what children need to understand at 10, so that when their 16 years old and 20 years old, they’re moving into a truly semi-independent state that they have earned through an experience and memory of persevering and having gotten through hardships. He also criticizes Washington DC politicians that seem addicted to their own incumbency.
  • ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
    Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com
  • Carl M Birkelkbach

The Investment Strategy Letter #724

Dow close to breaking into new record high!

The Dow Industrial Average is up 17% since November and is close to breaking above its all-time high of 26,828 set October 3, 2018 by breaking above it previous high set January 26, 2018 at 26,616. However, economic growth appears to be slowing.

THE CONFERENCE BOARD ECONOMIC OUTLOOK, 2018-2019
Percentage change, seasonally adjusted annual rates (except where noted)

 

  2018 2019 2018 2019 2020
  1st
half
III
Q*
IV
Q
I
Q
 II
Q
2nd
Half
ANNUAL ANNUAL ANNUAL
Real
GDP
3.2 3.4 2.4 2.6 2.5 2.2 2.9 2.7 2.2
Real
Consumer
Spending
2.2 3.5 3.1 2.5 2.6 2.4 2.7 2.8 2.4
Residential
Investment
-2.4 -3.5 0.0 0.5 0.7 1.0 0.0 -0.1 1.4
Real
Capital
Spending
10.1 2.5 4.0 4.1 4.5 4.9 6.8 4.4 4.8
Exports 6.4 -4.9 4.1 3.8 3.6 3.7 4.1 3.0 3.7

 

Prosperity and the Political implications.

In particular, growth for exports at 3.7% in 2020 is questionable, depending upon how the China negotiations work out. (More below) Republicans are touting how great the economy is doing. However, the economic blast from the recent tax cuts to the rich, that caused a $2 trillion dollar increase to our debt and the 2018 budget deficit of $779 billion, have only had a temporary effect. GDP growth in 2019 is forecast as up only 2.7% and 2020 up a measly 2.2%.

This slowing of growth could have significant political implications as President Trump’s popularity depends significantly on economic prosperity. Recent surveys have indicated that Trump’s base indicates that as long as the economy is doing well, they care little about the president’s lies (8500+ and counting) or his misogyny, or his obstruction of justice, or his racism or his denial of global warming or his preferential treatment of autocratic leaders, or his lack of empathy for equal upward mobility, or his separation of children from their parents, or his negation of NATO, or that his ‘swamp’ is full admitted law breakers and incompetents, or his lack of concern about anything except his own personal business interests and his popularity. Just as virtues reward, is virtue itself (Spinoza), vice and moral derogation have consequences for those that are complicit.

According to a recent Pew Research report, the United States, as ranked against other nations, is 36th in health care, 44th in math scores, 39th in basic education, 34th in access to clean water, 35th in meeting basic human needs, has the highest first day infant mortality rate and the highest child poverty rate at 21% among industrialized nations.  That’s one in every five of our children living in poverty!  As great nation, we must be better than that.

For me, it all comes down to this question; Is it human nature for us to be virtuous, kind and fair for the common good by seeking pluralistic solutions through a democratic process OR Is it human nature for us to be emotionally swayed by our greed and prejudices and to deliver our power and trust to an autocratic government of a demagogue? The battle for the hearts, minds and votes of the public continues as I speak.

As Bob Dillon sang, “The battle outside is raging! It’ll rattle your windows.  And shake down your walls. For the times they are a changing! And maybe this time, because of populism, things may not be a changing for the better! To quote from Nietzsche “The love of power is the demon of men. Let them have everything – yet the demon waits and waits and will be satisfied.” Or as the Pogo cartoon says; “We have seen the enemy and it is us!”

China

The Chinese currency has dropped to its lowest level in many years. Possible tariffs could toss China into a recession where growth is already slowing. China’s banks have given loans to questionable companies as $1.3 trillion of corporate loans are owned by companies were profits will not cover their interest payments. The problem in China could trigger banks losses that could start a worldwide recession. Money is flowing out of China. Tariffs will increase the problem. While some manufacturing jobs may come back to the US as a result of the tariffs, more jobs domestically may be lost, because the average American would have less spending power. The Peterson Institute for International Economics estimated that rather than bringing back jobs, Mister Trumps, tariffs could ‘result in a trade war and cost our economy more than 5 million jobs and possibly lead to a recession’.

I believe China is a ‘paper tiger’ that is not as big or as strong as it appears and is hampered by cronyism and corruption. Although China has a supposed $375 billion trade deficit with us, the actual figure is much smaller. For example, the export value give to the Apple X i-phone is $378. China contributes only $14 of the total cost for assembly while the rest of the cost is run through supply chains in the US and the rest of the world. Our trade balance ignores the value created by other countries that have preceded China in the chain. Tariffs may kill more jobs than it saves. In fact The Foreign Policy Association estimates that one dollar spent on Chinese imports is about 75 cents that goes into the US economy and that every job created in the metal industry through tariffs, would eliminate 16 jobs in other industries.

China doesn’t even believe its own statistics, as China’s provinces are growing faster than the whole. The China inflation rate is a government secret as they print money indiscriminately to bolster its shaky growth figures. Our Federal Reserve estimates that the US net worth is $60 trillion larger than China and yet, China’s money supply is estimated to be 75% LARGER THAN THE US.

With 20% of the world’s population they have only 8% of the world’s arable land and 10% of that is reported to be polluted. Coal still provides 70% of China’s power creating 16 of the worlds most polluted cities. About 435 of China’s 660 large cities are suffering from severe water depletion.

I fear China not because of its competition, but because of its vulnerability and possible effect on an upcoming economic crisis.

Kleptocracy (from Greek κλέπτης kléptēs, “thief”, κλέπτω kléptō, “I steal”, and -κρατία –kratía from κράτος krátos, “power, rule”) is a government with corrupt leaders (kleptocrats) that use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political powers.

Carl M. Birkelbach

New Books;

The Threat by Andrew McCabe. Written by the former FBI diector after Come. Writes “Trump has shown that he does not know what domocracy means. He takes no action to protct it.” The warnings are familiar.

The University of Oxford just predicted that 47% of all US jobs are at risk of being replaced by robuts and artificial intelligence in 15 years.

The Robuts are Comming by Andres Oppenheimer. sub-titled; The Future of Jobs in the Age of Automation. The last time an Oppenheimer had a message for us, it was as explosive and as devestaying as this forcast.

The Globotics Upheval: by Rus Belt Just kidding! by Richard Baldwin. Sub-titled: Globalization, Robotics and the Future World. Algorithms will also take ove whit-coloar jobs.

Rise of Robuts by Martin Ford. sub tiltled Technology and the Threat of a Jobles Future. He says, when the employment appocaplice comes, it will happen so fast that workers wont have no time to adjust.

Okay! I don’t know what to worry about 1st, the end of democracy, New York under water because of ‘global warming’ or the comming of a dystopia civilization led by the robuts. There are some advantages of being 79!

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl, his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

 

Bear Market Downside Projections

Bear Market Projrctions: Dow 17,150, S&P 2,031, NASDQ 3,469

The following stocks and indexes are breaking below June lows and forming the old HEAD AND SHOLDRES TOPPING FORMATION: DJI,S&P, FTSE,DJT,RUT WFC, JPM. Expect more rebounds. However if April lows are broken, abandon all hope.

The following indexes are pointing the way down and have gone stright down all year; HSI and other China indexes FXI and  DSM. Then there are the Banks all in free fall DB, HSI, CS, JPM, BNP. and EEM EMERGING MARKETS,

Goldman Sacks is now calling for GDP growth below 2% in 2019. How will get out of a recession? Stimulate the economy: Reduce intrest rates? No, theyare already low. How about a tax cut? No, just did that. How about the Fed buying bonds? No, the already have $4.5 trillion. We are out of bullets!

DOW INDUSTRIAL AVERAGE  FUTURE  LONG TERM SUPPORT ZONES

Fibonacci projections made 2011 in the Investment Handbook for Volatile Markets THESE NOW BECOME SUPPORT ZONES

 

Resistance and future support Resistance and future support Resistance and  future support Resistance and future  support  

Resistance

14,198 14,198 14,198 14,198 14,198
-6,470 -6,470 -6,470 -6,470 -6,470
7,728 7,728 7,728 7,728 7,728
X138.2% X150% X161.8% X 100% X 61.8%
2,752 3,864 4,776 7,728 12,503
14,198 14,198 14,198 14,198 14,198
17,150 18,062 18,974 21,926 26,701

S&P 500 INDEX

DOWNSIDE SUPPORT ZONES

1st Resistanc and Future Support Zones 2nd  3rd  4th  5th 
1,576 1,576 1,576 1,576 1,576
-666 -666 -666 -666 -666
=910 910 910 910 910
X38.2% X50% X61.8% X 100% X1 61.8%
126 455 562 910 1,472
+1,576 1,576 1,576 1,576 1,576
=1,702 2,031 2,132 2,486 3,044

 

Should the S&P break above its old 2000 and 2007 double top of 1,576 the upside potential would be a Fibonacci Resistance points of 1,702, 2,031, 2,132, 2,486 3,044 and AN EXTREEM HIGH OF 8,000. As with the Dow, this would indicate a new series of Bull Market could be beginning. It would also mean that we have somehow solved our economic and environmental problems. Now that I think about it, this seems a more unlikely scenario than the Bearish Downside scenario. However, what will be, it is not for the future for be to see, but obey.

NASDAQ COMPOSITE INDEX

DOWNSIDE SUPPORT ZONES

1st Resistance 2nd Resistance 3rd Resistance 4th Resistance 5th Resistance
2,861 2,861 2,861 2,861 2,861
-1,268 1,268 1,268 1,268 1,268
=1,593 1,593 1,593 1,593 1,593
X38.2% X50% X61.8% X 100% X1 61.8%
608 797 984 1,593 2,577
+2,861 2,861 2,861 2,861 2,861
=3,469 3,658 3,845 4,454

EXTREEM HIGH 8,000

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Downside Support Zones

STOCKS AND INDEXES BREAKING BELOW SHORT TERM SUPPORT LEVELS

The following stocks and indexes are breaking below June lows and forming the old HEAD AND SHOLDRES TOPPING FORMATION: DJI,S&P, FTSE,DJT,RUT WFC, JPM. Expect more rebounds. However if April lows are broken, abandon all hope.

The following indexes are pointing the way down and have gone stright down all year; HSI and other China indexes FXI and  DSM. Then there are the Banks all in free fall DB, HSI, CS, JPM, BNP. and EEM EMERGING MARKETS,

Goldman Sacks is now calling for GDP growth below 2% in 2019. How will get out of a recession? Stimulate the economy: Reduce intrest rates? No, theyare already low. How about a tax cut? No, just did that. How about the Fed buying bonds? No, the already have $4.5 trillion. We are out of bullets!

DOW INDUSTRIAL AVERAGE  FUTURE  LONG TERM SUPPORT ZONES

Fibonacci projections made 2011 in the Investment Handbook for Volatile Markets THESE NOW BECOME SUPPORT ZONES

 

Resistance and future support Resistance and future support Resistance and  future support Resistance and future  support  

Resistance

14,198 14,198 14,198 14,198 14,198
-6,470 -6,470 -6,470 -6,470 -6,470
7,728 7,728 7,728 7,728 7,728
X138.2% X150% X161.8% X 100% X 61.8%
2,752 3,864 4,776 7,728 12,503
14,198 14,198 14,198 14,198 14,198
17,150 18,062 18,974 21,926 26,701

S&P 500 INDEX

DOWNSIDE SUPPORT ZONES

1st Resistanc and Future Support Zones 2nd  3rd  4th  5th 
1,576 1,576 1,576 1,576 1,576
-666 -666 -666 -666 -666
=910 910 910 910 910
X38.2% X50% X61.8% X 100% X1 61.8%
126 455 562 910 1,472
+1,576 1,576 1,576 1,576 1,576
=1,702 2,031 2,132 2,486 3,044

 

Should the S&P break above its old 2000 and 2007 double top of 1,576 the upside potential would be a Fibonacci Resistance points of 1,702, 2,031, 2,132, 2,486 3,044 and AN EXTREEM HIGH OF 8,000. As with the Dow, this would indicate a new series of Bull Market could be beginning. It would also mean that we have somehow solved our economic and environmental problems. Now that I think about it, this seems a more unlikely scenario than the Bearish Downside scenario. However, what will be, it is not for the future for be to see, but obey.

NASDAQ COMPOSITE INDEX

DOWNSIDE SUPPORT ZONES

1st Resistance 2nd Resistance 3rd Resistance 4th Resistance 5th Resistance
2,861 2,861 2,861 2,861 2,861
-1,268 1,268 1,268 1,268 1,268
=1,593 1,593 1,593 1,593 1,593
X38.2% X50% X61.8% X 100% X1 61.8%
608 797 984 1,593 2,577
+2,861 2,861 2,861 2,861 2,861
=3,469 3,658 3,845 4,454

EXTREEM HIGH 8,000

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

THE INVESTMENT STRATEGY LETTER #723

Election Blues: The consensus is that the upcoming election will be important. However, as far as the economy and the stock markets are concerned, I don’t think so. In my opinion, with either Republicans or Democrats, the economy is going to slow down and huge US and worldwide debt could lead to another 2008 collapse of the stock markets on a worldwide basis. We are on a ship that has already sailed.

A Slowing Economy: The Fed’s Open Market Committee forecasts as of 9/26/2018 are for 2018 to be up 3.1% , up only slightly from 2017 +2.6%, in spite of a 2ed quarter surge brought on by a $1.5 trillion tax cut to the wealthy. Statistics so far indicate that 80% of the tax saving are being used for non-productive use, such as stock buybacks .The Fed’s forecast for GDP growth 2019 is +2.5% and for 2020 +2%. In other words, expect an economic slowdown. Meanwhile, the US budget deficit is forecast to go up 17% to $779 billion and in 2020 to $1 trillion. (This is the end of the myth that the Republicans are fiscally conservative). This will bring US total debt in 2018 to $21.48 trillion up $1.58 trillion from 2017. The Fed funds rate is now at 2.25% and is projected to go up to 3.5% in the next year. Higher interest rates are already slowing the housing market as Startups are down 12.3% and New home sales down 5.3%.

US Debt: Meanwhile US corporate debt of the S&P 500 index has tripled since 2010 to one and a half times annual earnings. This is near the historical peaks of the last 30 years, which were followed by recessions. In addition many companies have gone private since 2008 and are beyond regulatory oversight. As reported in the 9/10/18 NYT, many of these firms were purchased by private equity firms and that these investments “have debt at six times higher than their annual earnings – or twice the level that a public rating agency would consider as high risk or junk.”

The Federal Reserve still has $$$$Four and a half trillion dollars of bonds (acquired during a period of quantitative easing since 2008) to sell back to the marketplace (quantitative tightening) and the  banks  now own $350 trillion in derivatives ($65 Trillion in 2008). This is like a bomb ready to go off.

World Debt: At the same time the US is recklessly plunging itself into debt, global financial markets have tripled over the last three decades so that in 2008, they were 347% of the world’s GDP, and now stand at 360% of worldwide GDP.  In the last ten years the world’s largest Central Banks have expanded their balance sheets from $5 trillion to $17 trillion in order to promote the recovery. Much of this newly printed easy money has bolstered the financial markets. China has printed the most money of any nation to bolster its state companies, which would not otherwise qualify as a good loan. What happens if interest rates rise so that the expense is so large that more debt cannot be issued, as it cannot be paid back?

Crash! While the US markets have gone down a little, at the time of this writing 10/26/18, the Hang Seng index has fallen this year from 33,484 to 24,589, Emerging market EEM shares have fallen from 52.08 to 38.14, the German DAX from 13,596 to 11,051.Deutsche Bank, (Trumps bank and the stock I have called the canary in the coal mine) has fallen to new lows to 9.60 from 20.23 this year and from 144.52 in 2008. Will these markets pull the US market down or will the US markets pull the rest of the world up. In the past I would have bet on the US markets pulling the rest of the markets up. Not now! Don’t be fooled by ‘dead cat’ bounces.

Middle Class Stress: We are faced with what seems like an endless cycle of gluttony, inequality, dishonesty, bigotry, intolerance, theocracy and authoritarianism. We are being ‘distracted’ by the President’s (kleptocratic) daily celebrity theatrics, while the harmful side effects of oligarchy capitalism and globalization have created distress on Middle Class, who find themselves increasingly replaced with automation and lower priced labor. We have taken our eye off the ball as 80 people own 50% of the world’s wealth and the Walton’s are wealthier than the bottom 40% of Americans and all income growth goes to the top 1%. The Middle class is in trouble with 50% of the population unable to meet a $400 emergency. I continue to believe that this economic inequality will reach a tipping point, where all boats will sink.

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

 

 

FUTURE SUPPORT ZONES

DOW JONES INDUSTRIAL AVERAGE  UPSIDE RESISTANCE  and FUTURE  SUPPORT ZONES

Fibonacci projections made 2011 in the Investment Handbook for Volatile Markets

 

Resistance and future support Resistance and future support Resistance and  future support Resistance and future  support  

Resistance

14,198 14,198 14,198 14,198 14,198
-6,470 -6,470 -6,470 -6,470 -6,470
7,728 7,728 7,728 7,728 7,728
X138.2% X150% X161.8% X 100% X 61.8%
2,752 3,864 4,776 7,728 12,503
14,198 14,198 14,198 14,198 14,198
17,150 18,062 18,974 21,926 26,701

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Three Letters to the press

Three  letters recently published in the Summit Daily News

Congratulations on your editorial on August 16 entitled ‘President Trump, the enemy isn’t us.’ We will remain the land of the free, as long as we are the home of the brave. Thanks for being brave. I am confident that truth will, in the long run, prevail.

Also, thank you for publishing various views in your Columns and Letters, including mine. Like most Americans, I love this country with my whole heat and soul.  I look forward a time when as a nation, we can come together again and when the judgment, mistakes and limitations of the past can be replaced by compassion and understanding. We have got to change, from fear to hope. We must choose peace over war, mercy over violence, understanding over righteousness, forgiveness over punishment, gratefulness over ingratitude, the virtuous over the unethical, compassion over intolerance, openheartedness over judgment, humility over pride, love over hate, joy over anger, community over selfishness and generosity over greed. We have got to shift our priorities, from the battlefield of war to human dignity and our ‘common good.’ We have to be aware of our potential, both individually and as a great nation. We have to change from stressing our differences, to opening up to our connectedness.

We will be better together!

Carl M. Birkelbach

To be Together Again!

In the July 21 article by Michael Reagan (son of Ronald Reagan), he asserted that Democrats went “nuts” with glee when our President “screwed up.” Not so! It would be better for ‘our’ nation, if the Republican Party could be Great Again! Once Ronald Reagan (voted for him twice) stood up to the Russians and said “Mr. Gorbachev, tear down this wall!” Once, conservative Republicans, during the Clinton years, created a budget surplus. Now a Republican Congress has passed a tax plan, benefiting corporations and the top 1%, that has created a $1.5 trillion budget deficit, just to get some temporary growth in the economy. Once Republicans were for family values, now they separate families from their children. Once, Republicans were for strong alliances with our friends. Now they demonize our friends while praising dictators that are no more than gangsters. Once Republicans, in bipartisan cooperation, passed the Fresh Air and Water Act, (Nixon), The Voting Rights Act,  Dodd Frank reforms protecting us from a 2008 type financial fiasco, immigration reform, gun reforms and civil rights protection. Now Republicans are driven only by ‘donor power,’ no matter what the public thinks.  Once we had diplomacy and civility, now we have Tweets and over 3,000 documented lies. I haven’t left the Republican Party, they left me.

It is unfortunate for our country that 87% of Republicans approve of our president’s actions. They have hitched themselves to the star of an unscrupulous personality that pulls us apart as a nation. Instead, we have to be aware of our potential, both individually and as a great nation. A new era of globalization, multiculturalism, automation and a carbon free economy is descending on us. We must address these challenges, as opportunities. It will be Great, to be ‘Together Again!’

Keeping the conversation going

In a letter published July 28, Garnett Payne asserts that “We cannot afford the radical left wing socialist agenda of free pre-K, free college, free health care,…etc. ” I disagree! We cannot afford ‘not’ to address these issues, while allowing huge tax cuts to corporations and the wealthy and creating a $1.5 trillion deficit, just to get a temporary jump in our economy.

The American Dream is quickly fading for many and so is the prospect that our children will be better off than us. Many cannot afford health care, are paid a wage that cannot provide for their families and many cannot afford college for their children or have a huge college debt. Every day 6,000 people are being evicted from their homes. This is why? Between 1980 and 2017, all of the income growth has gone to the top 1%. One family, the Walton’s earn more income each year, than the bottom 40%, or 130 million Americans. With productivity up, there have been little increase in working wages and yet CEO pay has gone up from 65 times, to 250 to 500 times the average worker’s pay.  Small businesses and entrepreneurs, who employ 80% of the nation’s people, are being squeezed out of business by unfair advantages given to Large corporations and Big banks. According to a recent Pew Research report the United States, as ranked against other nations, is 70th in health care, 44th in math scores, 39th in basic education, 34th in access to clean water, 35th in meeting basic human needs, has the highest first day infant mortality rate and the highest child poverty rate (21%) among industrialized nations.  That’s one in every five of our children living in poverty!  As great nation, we must be better than that.

You say you wish to open up a dialogue. However, while you say you are a fiscal conservative, your party has taken a far right turn toward libertarianism, that only helps the rich while declaring anything for the ‘common good’ as Socialism.  Socialism is when the government controls everything, including industrial production. Democrats are merely asking to create a level playing field of opportunity that promotes the general welfare for the benefit of the entire nation.

Carl M. Birkelbach

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

FOLLOW THE FLOW

THE FLOW

I am resting, on the beach, out of the river’s flow

It still flows, but without me

On the beach, Mondays and Sundays are the same

In the flow, I was painfully tossed about

There I cried out in a voice almost moaning

Who am I and where am I going

On the beach, there is stillness and peace

 

I have been here once or twice before

But only for a while, then tossed back in the flow

Where I become immobilized, without control

Battered and disabled by ambition, now I see

Into the flow and over a cliff in a waterfall

In painful agony I cried out, yes I can

Yes I can do what, control the flow?

 

You only control the flow in your dreams

The flow controls you, not the other way around

On the beach, I can just watch the flow

Danger! I can feel the flow pulling me back in

Stay calm, take a deep breath

The flows movement is temporal, stillness is reality

I have come a long way to achieve this beach

 

Out of the frozen tundra I have come

How long can I stay in a state of grace on the beach?

This is what it is like to live without stress

Maybe I can just dip a toe into the flow

Oops! I am being swept up by the current

Ambition and desire are sucking me back in

No, rise above, Rise above, Rise above!

 

Here, I am above the flow, even above the beach

Here, the veil of Maya and Neith are finally lifted

Here, I am connected to a collective spiritual experience

Here, I have arrived at fulfillment

Here, time ceases to flow with the flow

Here, movement and stillness have no meaning

Here above the flow, we are One

 

Wow! Look at that river flow

The flow is turning wheels and the wheels are churning lives

It is just a game, but people think it’s real

In the flow there is no rest, there is no winning

There is only the flow, ever onward

But from here above, it looks so silly

Being above, is even better than on the beach

 

So many are in the flow, some as tears

If I were to return, it would be different for me now

The new me, would be eager to teach what I have learned

Should I take another trip down the rapids?

Maybe I should try and reach higher instead?

Actually, Here there is no higher

Here, salvation is  self evident

 

The sirens of the flow beckon me back

Why? To make the world a better place?

Maybe I can ease the burden of others?

There are no easy answers, but I can help, I can try

This time I am better prepared to enter the flow

This time I have seen it from above, I understand

Look out. Here I come again!

CARL M BIRKELBACH