Puerto Rico Default – Welcome to Big Bang

Puerto-Rico

A group of hedge funds holding a large proportion of Puerto Rico’s debt have demanded that its government fires teachers, collects more taxes and reforms labor laws, as the US territory contemplates default. This is the battle between bond holders and the people that is not going to end nicely.

While hedge funds may be buying up distressed bonds and then demanding full payment, these type of vulture funds will eventually lose everything. The entire government debt structure is just out of control. Puerto Rice will be the first quasi-state to go belly-up. Others will most assuredly follow. Welcome to Big Bang.

Windows 10 – Be VERY Careful!

msoptout

Once again, Microsoft screwed the world with its Windows 10 feature called Wi-Fi Sense. This nasty feature has serious legal implications for it will automatically connect your personal Wi-Fi network to anyone in your e-mail list using HotMail, Skype, or Outlook, and even Facebook, making those friends questionable. If any such person comes within range of your home Wi-Fi, they could secretly access your system from hundreds of yards away.

The real problem with this is rather sinister. The government would no longer need a search warrant for your surrendered privacy; good luck finding a judge who will uphold the rights that exist only in your imagination.

I just saw the new “Terminator” movie. The AI computer that decides to eliminate humankind begins as a system called “Genesis” with exactly the same profile – to connect you to everyone instantly. While I do not believe that we are dealing with such a creature, I do worry about the full Stalinistic powers this provides the government, as this will grant them access to hunt down anyone who dissents from their view. Suddenly, we all become the next Snowden since disagreeing with the government is now TREASON. Such powers are not necessary, and while Windows 10 supposedly allows you to opt-out, this setting is the default – they know what they are doing. The vast majority of people do not understand computers and they will be surrendering all rights to Microsoft without understanding what they have done. Why is Microsoft acting in such a hostile manner towards human rights?

IMF Pulls Out of Bailout Loans for Greece

Lagarde-Christine-imf

The Board of the International Monetary Fund (IMF) decided on Wednesday not participate in the next credit-round for Greece. The Board denied any new loans to Athens, because the country’s debt was too high and the Greek reforms requested by the Troika are not likely. It is entirely possible that we will see Greece in crisis with the turning point on the ECM Sept 30th/October 1st.

Socrates Report

Socrates-IPad

Overall, we will be providing three primary levels of service – Investor – Trader – Institutional. The distinguishing factors are deigned based upon needs. We will have the overall outlook and trend for the Investor, then the Trader will be provided timing and price target objectives. On the Institutional level, we will provide portfolio construction, asset allocation, and two primary levels of service geared to either hedging (physical product or currency) or investment.

The advantage of Socrates is there are no personal opinions for nobody can possibly forecast the future trends with simply an opinion on any consistent basis. Being right once or wrong once means nothing. Only consistency matters.

The greatest mistake people make is they fail to comprehend that it is always TIME and PRICE. Those who ignorantly expect some correct forecast in price only are doomed for they fail to comprehend how markets even function. We can forecast gold will drop to $1,000 or rise to $2,300 but each is irrelevant without TIME. Falling to $1,000 before its TIME warns of lower lows. Likewise, failure to reach a target on the upside by a specific TIME also fails to complete a forecast. Both objectives must be met and PRICE is secondary to TIME. It is always TIME that is the primary objective – not PRICE.

The computer wrote this intro piece on AOL. This is not the entire report that Socrates will provide. There is a lot more including trading with its historical hypothetical trading results back to inception of each instrument.

“At this time, my analysis in AOL shows a major reaction rally last year which has resulted in a 3 year Reaction High forming at 532.8 up from the major low established back in 2011. In order for this rally to continue beyond 2014, we need to see new highs this year. A higher year-end closing above 461.7 is required as well. In order for AOL to turn bullish, we need a rally to extend beyond last year with new highs here in 2015 or at least a higher closing for year end. If new highs can be established, then a further rally into 2018 becomes possible. Holding above 514 on a monthly closing basis keeps AOL in a bullish posture, but a monthly closing beneath that level will signal a correction is possible. However, should new intraday lows develop beyond this target year, then the final low could take place during 2017. Our extreme projected resistance for this year stands at 1573. A continued rally depends upon holding 323.1 intraday. There are 61 days until the next ECM target, which is Wed. Sep. 30, 2015. A high forming on this precise target will warn of a correction.

The broader trading range is defined by the Monthly Reversals. The Monthly Bullish Reversal stands at 514 whereas the Monthly Bearish Reversal lies below at 419. Broadly speaking, a month-end closing BELOW 321.9 is where the critical support lies. This currently resides some 35% below the immediate trading level showing where the major support indeed rests. Only a monthly closing BELOW this level will confirm a long-term bear market is in motion. Otherwise, here lies important dynamic support underlying this market and holding this level is a clear line of demarcation in long-term trend.

The more immediate trading range is defined by the Weekly Reversals. The Weekly Bullish Reversal stands at 382 whereas the Weekly Bearish Reversal lies below at 382.

MONTHLY TIMING ANALYSIS

Our primary targets on the Turning Point Model, defined as highs or lows on an intraday or closing basis, are Jul. 2015, Sep. 2015, Jan. 2016 and Apr. 2016

Our most critical model, the Directional Change Model targets are Jul. 2015, Aug. 2015 and Feb. 2016. This model often picks the high or low, but also a breakout to a new higher trading zone or a breakdown to a new lower trading level.

Looking at the volatility models suggest we should see a rise in price movement during are Aug. 2015, Sep. 2015, Dec. 2015, Jan. 2016 and May. 2016

However, our Panic Cycle targets where we may see either an outside reversal or a sharp move in one direction are Jun. 2015 and Dec. 2015″,

Gold Has NOT Bottomed Yet

Gold-400-oz-Bars

Gold elected a Monthly Bearish Reversal today at 1155. We have some support down at the 1042 level for now. Technical support for August lies at the 1029 level. We will be issuing the update on gold for those who purchased last year’s report by the end of the month to cover the downside. This will cover gold moving into the low updating the weekly Arrays.

The long-term forecasting provided in last year’s report has not changed. Everything is in line for the low to form on the Benchmarks. Personal opinion may change as it always does since we are only human. But the numbers and time are unyielding. Either both are reached or we wait. In this respect, the computer is far better than even I could hope to be personally.

Gold had 3 primary PATTERNS it could have taken following a 13 year high which were separate and distinct from PRICE. The first is the reaction phase which comes in either 2 or 3 units. If this were to have elected a Yearly Bearish we have at $681, then it becomes a Waterfall Event moving to a change in trend. That does not appear to be likely long-term. That is what the Dow Did from 1929 high electing it first Yearly Bearish Reversal in 1930 which resulted in the bottom by July 1932 within the 3 year reaction time frame.

Of course we have the typical people who just fight the trend and are desperate to try to prove me wrong on something so they can declare gold will not decline and they will be right no matter how wrong they have been to date. These are the typical fools who will be wiped out since they are always separated from their money rather easily. Opinions as always mean nothing for even in law it is distinguished as a comment in passing known as “dictum”. For something to be “law” the Supreme Court must expressly state the principle, not merely mention something in passing. So no matter what field we talk about, opinion is not worth a grain of salt. My personal opinion is never a forecast – only the computer can do that – not me.

We must always play it by the numbers and time. Nothing else matters at the end of the day. Clearly, gold is not in such a Waterfall Event no matter how bearish everyone gets. We have moved beyond the 3 year window from 2011 and the Yearly Bearish Reversal at $681 has held. To make that final low in gold, the vast majority have to write off gold entirely and regard it as the WSJ just did – nothing more than a “pet rock”. So as the bearishness builds, this is good for establishing character separating the traders from the fools who just believe propaganda and trade fundamentally. But the hate mails still come in and this warns the tree must still be shaken. When they stop, then the market will be ready to rebound but only on short-covering – not new longs. So expect no sudden news of a huge buyer to save the day. That will NEVER happen. The low is made by massive shorts just as highs are made by fools rushing in an believe the propaganda of the promoters at the top. For those who just hate whatever I write, stop reading this blog. Just keep buying for that is your destiny in this life. Perhaps you need to learn a bitter lesson – it’s not fiat, inflation, paper gold, or Fort Knox. Please just read those who preach what you want to hear how the world is wrong and you are the only victim.

So far, we are still dealing with a reaction only phase. That could have produced a low as soon as 2013 with a rally into 2015.75, but that would have required also a Phase Transition in the equities, which did not materialize. It would have also required a premature peak in government (low in interest rates), which Larry Summers assured us would not happen by justifying negative interest rates. A 3 year reaction would have been a low in 2014. We just proved that pattern wrong as well making new lows here in 2015. This is a bear market so we have to do some damage. The PRICE objective of breaking $1,000 was not met within that 3 year window so we must look to the Benchmarks as laid out in the International Precious Metals Report.

Gold has not bottomed as of yet for it must line up with everything else. The sell signal at the end of July was yet another confirmation that new lows still lie ahead. The Phase Transition in the Dow was postponed for the post-2015.75 era because this target is manifesting as the peak in government – not the private sector assets. Therefore, we should see the low in short-term rates with this target with the last rush into Flight to Quality. This postponement in the Dow likewise secured the decline in gold would be protracted rather than the typical 2 year correction with the low in 2013 or even a 3 year reaction low in 2014.

Those targets for the low in gold are in the International Precious Metals Report that warns of the final decline. We are NOT looking for the low in gold to be on October 1 either. If that materialized, it would be extremely profound. However, the more likely event will be the rush to cash completing the final Flight to Quality.

How high gold will rise from a major low depends upon the entire political landscape but more importantly, the technical projections and the Reversals generated from that low. Will we still have a free market for gold? Or will gold move entirely underground, deemed the money of “terrorists” in an attempt to hunt down business conducted off the grid?  This we will cover for the future rally in the next Special Report. Those who have projected hyperinflation have no sense of history nor of what they even forecast. ALL tangible assets rose in such events – not exclusively gold.

ctrl_alt_del

There is little question that we are in the meltdown phase of Western civilization. Politicians, like Hillary, are openly corrupt and know that they will still have herds of supporters no matter what crimes they commit just as the people who continue to believe the gold promoters no matter how obvious it has become they are running out of excuses. There are followers and then there are free thinkers. Such events separate the drones from the real survivors. We as a society get the politicians we deserve. This is why society has to crash and burn, hitting the control-alt-delete sequence to reboot. This seems to come around about every 309.6 years or so. We simply have to suffer the pain before the followers wake up and say, “Oh shit! Where did my future go?”

German-1925-Rentenmark

When gold rises, other assets will rise as well. Even in a hyperinflation, all assets make that transition to the new land of currencies. The German Rentenmark that replaced the hyperinflation currency was backed by real estate instead of gold. So do not listen to the gold promoters as they speak with forked-tongue. Sure, gold will rise, but so will equities and in the end real estate, although the latter will greatly depend upon taxation.

All things will be redenominated in whatever currency we end up using. The dollar is NOT the problem. The entire system based upon the same structure of perpetual debt is the problem.

For now, the Greenback is moving higher. With a rate hike by the Fed, we should start to see panic buying as all the dollar denominated debt will take a hit forcing short-covering in the dollar.