September 30, 2016

Here are today’s videos and charts (double-click to enlarge):

Gold & Silver Bullion Video Analysis

Bonds, Currency, and Stock Markets Video Analysis

Precious Metal ETFs Video Analysis

SF Juniors Key Charts Video Analysis

SF Trader Time Key Charts Video Analysis

Thanks,

Morris

About Super Force Signals:
Our Surge Index Signals are created thru our proprietary blend of the highest quality technical analysis and many years of successful business building. We are two business owners with excellent synergy. We understand risk and reward. Our subscribers are generally successfully business owners, people like yourself with speculative funds, looking for serious management of your risk and reward in the market.

Frank Johnson: Executive Editor, Macro Risk Manager.
Morris Hubbartt: Chief Market Analyst, Trading Risk Specialist.

website: www.superforcesignals.com

When there is a big disagreement between the value of the spot VIX Index and the prices of its futures contracts, that carries important information about trader sentiment.

As of the close on Sep. 28, 2016, the spot VIX was well below all of its futures contracts. The chart above measures the spread between the spot VIX and the highest priced VIX futures contract, which is currently June 2017. The direct message is that VIX futures traders do not think that VIX value in the 12s is likely to persist all the way until the futures expiration. The image at right...continue reading for the chart and more analysis HERE

…related:

What Blows Up First, Part 3: Really, Deutsche Bank?

John Mauldin, Editor
Outside the Box
JohnMauldin@2000wave.com

The Islamic Hatred of Modernity

Dr. Woody Brock
Strategic Economic Decisions, Inc.
April 26, 2016

“Not free thought for those that agree with us, but freedom for the thought that we hate”
– US Chief Justice Oliver Wendell Holmes, Jr., 1929

Terrorism is here to stay, and it is now beginning to impact the economic performance of many nations – in particular the performance of the service sector. In this brief Memo, we set forth a few thoughts about what underlies this phenomenon, and what to do about it.

ISIS versus Modernity and the West

Relative Power of ISIS versus Europe: The usual determinants of relative power (e.g. wealth or the size of an army) are not very relevant to assessing the struggle between ISIS and the West. [By ISIS we refer not only to ISIS proper, but to any of its affiliated groups as well.] For the conflict is less a militaristic one than it is a war of nerves between Jihadists who carry out scattered sting operations, and Europeans and Americans lacking both the will and the coordination to properly respond. An additional source of Jihadist power stems from their status as True Believers, making them a very dangerous kind of opponent. Their moral certainty immunizes them against normal threats such as being killed. The number who do not fear death is sufficient to spell trouble for decades ahead.

What is it that makes these extremists so morally superior, and so hateful of the West? In part, their superiority stems from their absolute faith in the truth of the teachings of the Koran. But this is only the tip of an iceberg of hatred. For their religious convictions are amplified by their detestation of the cultural, economic, ethical, and political values of Westerners. At a deep level, their terrorism stems from their hatred of modernity itself. We in the West are seen as weak and morally dissolute. For not only do we possess no religious fervor, but we lack moral resolve of any kind due to the anesthetizing effects of our materialistic, welfare-based social system. Such ethical values as we have stem not from fear of any God, but rather from an attachment to mushy concepts of “fairness” ranging from the “right” to nine weeks of vacation, to t he right to never be drafted to fight a war. In the US, citizens’ erstwhile chant of “give me liberty or give me death” has morphed into “give me liberty or give me latte.” All in all, ISIS’ conviction of holding the moral high ground is a major source of their power over the West.

Reinforcing this power of fundamentalists is their strategy of implementing fragmented hit-or- miss strikes. They specialize in ongoing, unnerving terrorist attacks in public places. The West’s superiority in the number of security personnel and in intelligence-gathering does little to prevent these random attacks which can occur in hundreds of different emporia. In this regard, it is sobering that more than 5,000 EU-based fighters have already been to Syria for training in terrorist tactics, according to the US-based consultancy Soufan. This number will grow given the poor economic conditions in Europe where the unemployment rate of males under 30 exceeds 25% in many nations.

Finally, today’s ongoing Jihadist attacks are concurrent with the new European immigration crisis. Given the implications of soaring immigration for tighter border controls, the increasing threat of Brexit, and problems endemic to the Euro, it is likely that the EU as we have known it will cease to exist. There will then be no semblance of any “unified” EU stance against ISIS. Instead, we will observe fragmented and ineffectual responses as well as the suspension of many civil liberties now taken for granted.

This brief analysis suggests that the power of ISIS against Europe is much greater than might appear to be the case, despite Europe’s greatly superior power as traditionally measured.

A War against Modernity: The importance of the culture war underlying the Jihadists’ hatred of Westerners cannot be understated. In their eyes, we are modernist devil worshippers. Women should be kept at home, devoid of any rights. They should be virgins when they marry. Adultery is a sin punishable by death, as is homosexuality. The fact that many citizens of Muslim nations do not share these views does not seem to matter. Consider Iran: the majority of the people value democracy, and even look favorably on the US. But so what? The Mullahs and the Red Guard rule with an iron fist, as we have seen during the recent elections when the candidates favored by most voters were stricken from ballot list. Moreover, Iran’s autocratic leaders are out in front in an effort to fund terrorist groups, in one form or another.

Consider the words of the eminent Simon Schama in a recent March 26 Financial Times Op-Ed piece:

We are not talking fine points of Shia-Sunni theological controversy here. By every means possible Isis is at pains to let us know they will kill as many of us as it takes to sow such mayhem in the heartland of the kaffir world that it will be impossible to resist mobilising the “Crusader” army for the promised apocalyptic showdown out of which the Caliphate will emerge forever victorious.

Also consider the comments of Professor R. Vaidanathan of the IIMB in Bangalore:

Radical Islam is not fighting Christianity – which anyhow is dead in Europe – but it is fighting modernity. Islam is frightened of modernity destroying their religion and culture, however unacceptable this culture may be to European liberals…..

Europe thought – à la Merkel – that they can buy peace with radical Islam by “requesting” them to integrate. But integrate with what? Integrate with “immoral Europe” where women are exhibited as “open meat”[(in the words of the Australian Imam] who are “poisonous.” [https://rvaidya2000.com/2016/03/23/idea-of-europe-is-dead/]

Contrast ISIS’ moral resolve with the pusillanimous attitude of Westerners. Most assert their disapproval of fundamentalism, of course. But their live-and-let-live attitude sees it as a “right” for people to “express their views” and espouse any religion they wish – including the Religion of Hate. The problem with this view is that the Religion of Hate is unlike any other religion in espousing the murder of all non-believers. Excessive tolerance further undermines the will of the West to fight back against Jihadism in a resolute way.

How the West Can Best Deal with Fundamentalism – Insights from Game Theory

In game theory, there is a fundamental distinction between positive-sum bargaining games, and zero-sum games. In bargaining games, it is assumed that both sides can be better off by agreeing on a way to “divide the pie” instead of playing their optimal threat strategies and ending up with no pie – or worse. All such games are positive-sum in nature. In a zero-sum game, however, there is no pie to divide, and no bargaining compromise is possible.

Most of the analyses of how the West should confront fundamentalism fail to make this all-important distinction. Analysts implicitly assume that negotiation strategies exist, strategies that will somehow end up with an acceptable compromise. President Obama’s stance towards Iran, Russia and China offer examples of this approach. In all three cases, he turned the other cheek, and attempted to “reset” relations with these nations expecting they would reciprocate. All would end up better off. But his antagonists ended up taking full advantage of his weakness, reneged on many agreements, and made Obama look as incompetent at bargaining as he has proven to be.

Professor Schama is right in his comments above. He is stating that, in effect, we are playing a zero-sum game. ISIS wants nothing from us in exchange for something. They simply want to destroy us. Analogously, Iran has no intention of settling with Israel. Its stated goal is the elimination of Israel. In such cases, the optimal strategy (for the West) is to identify the enemy’s vulnerabilities, and having done so, to sow as much grief and pain as possible. The fact that the enemy are scattered and that some of their recruits are happy to blow themselves up does not relieve us of the responsibility to hit where it hurts: recruits that do not wish to die (the vast majority), all training camps (we know where some thirty of these are located), family members, etc. We must pursue such targets both on their home ground, as well as within the EU and the US. There is also th e question of how to extract intelligence from terrorist murderers who are captured. Just as an intelligent economist does not believe in free trade for a nation unless other nations follow suit, likewise enemies should be treated in accord with the Geneva Conventions only if they themselves adhere to them, adherence enforced by, say, an effective United Nations if one ever exists. Saying this is, of course, politically incorrect in the extreme. But reality beckons.

The currently fashionable suggestion that what is needed is “for Europe to better ‘integrate’ immigrants” is as vacuous as the citations above assert. Most immigrants want to and are able to integrate over time. They end up great assets of the nations they immigrate to. But as a matter of faith, the bad guys will never integrate into that world of sinners they hate. The West needs a coherent, broad-based, long campaign dedicated to destroying every aspect of terrorist operations. This need not imply a decade with large numbers of troops on the ground. But there will be phases requiring such a presence. Just consider what Russia achieved in its recent and relatively mild strategy against the opposition to the Assad regime. They hit hard, it worked, and they have now pulled back – for the moment. Their effectiveness yet again renders the indecisio n of President Obama a national embarrassment.

Within Europe, security must of course be tightened, but not at the expense of the crippling day to day economic life of people – precisely the outcome ISIS seeks. Leaders should encourage a much more stiff-upper-lip response by citizens than they have.

POSTSCRIPT

Political Correctness and the Lack of Sense of Humor in All True Believers

There is one common denominator of all True Believers, namely a lack of sense of humor. This is as true of terrorists as it is of today’s political correctness police in the US, spearheaded by those who traffic in wooly ideas about gender and class. What is happening on US campuses is outrageous, and recalls the moral absolutism espoused by Jihadists overseas. Freedom of speech is being seriously abridged, as are rights of free association. To repeal the right to free speech, all that is needed is some belief that certain comments are “inappropriate,” to use the word of the moment. “Trigger notices” warning that eight Shakespeare plays should not be taught constitute a reductio ad absurdum on the part of university heads. As for the rights of male students to a fair hearing in the case of alleged sexual harassment, hyper-risk-averse “administrative panels” now serve as prosecutor, judge, and jury. There is often no way for an accused male student to receive a proper defense. When the right to self-defense is abridged, it is time to vacate the new status quo.

What US Chief Justice Oliver Wendell Holmes wrote in 1929 about the all-important right of freedom of thought and speech (cited at the opening of this essay) remains as true today as it was eighty-seven years ago. Silencing people who say things you do not want to hear amounts to a surrender to oppression. If the PC police resent this reality, they should perhaps recall the words of President Truman: If you can’t stand the heat, get out of the kitchen.

The networks say this past Monday’s first presidential debate was the most-watched TV event of all time. Over 100 million tuned in when the debate started at 9:00 pm EST.

I think the number was much higher, perhaps 200 million or even 300 million, when counting the rest of the world and multiple people watching the same TV.

Trump is crass, rude, a liar and a BS artist. But he’s pushing the right buttons of the American population and has been all along.

I anticipated as much way back in 2013 when on the Weiss Wealth cruise, I announced the rise of my war and geopolitical cycles and warned of rebellions and antiestablishment moves, not to mention outright revolutions and wars in the years ahead.

What Trump’s popularity is telling you is precisely that for the U.S.: It’s time for a revolution. The majority of average Americans want to get rid of the old, the status quo and bring in the new, from outside the establishment.

What that “new” will be, only time will tell. And despite losing the first debate …

My Models Predict Trump Will Win the White House

It has to do with my cycle work and the convergence of several important economic and geopolitical cycles that is occurring now and will continue as a Category 5 hurricane for the entire globe heading into 2020/21.

For the world is facing the worst of times, even worse than the Great Depression. And there is only one of the two potential leaders who fits that bill, and it’s Donald.

Yes, I believe Hillary would make a better president — even though she too is full of lies, deceits, corruptions, conflicts of interest and BS.

But here’s the thing: If my models are wrong and Hillary wins the office, it won’t change things much at all. The global macroeconomic picture will look perhaps a tad better, but in reality, it won’t be.

The only thing that will change is which investment sectors will do well under either candidate and which won’t.

You can rest assured that I’ll help you with that in my Real Wealth Report and premium servicesthat aim for large speculative gains — as soon as we know who wins in November.

But as I said earlier, Trump is likely to win the White House. Either way, it will be a one-term job, for come 2020, there will be yet another change, probably one that sees the true rise of a third party altogether, the Libertarian Party.

Now, to the markets. It’s already late September and nearly every market my AI models digest continue to point lower into October 6/7.

But we’re running out of time. If we don’t soon see further moves lower in the metals, in stocks and foreign currencies …

Then it will be back to the long side, buying dips and looking for a rally into year-end. Even if Donald wins the debates and the election.

Why? It’s simple. Even with one of the two worst candidates in American history on the edge of taking the White House …

The U.S. economy, property and investment markets will remain magnets for foreign capital fleeing parts of the world that are in much worse shape than the U.S.

Think Europe, who’s going down the toilet with a hair-brained currency experiment, with its strongest economy, Germany, now weakening.

With its huge Deutsche Bank now on the verge of collapsing, and a population now rising up against its once hugely popular Angela Merkel …

And where just over a week ago, German Chancellor Angela Merkel and her Christian Democratic Union (CDU) had its worst-ever election in Berlin when the party was voted out of power.

And replaced locally by the surging nationalist party Alternative für Deutschland (AFD).

Think the Middle East, Syria, Iran, Iraq, Jordan, Turkey, Libya and more. A cesspool of problems. Would you want to keep any money or investments there?

Think Japan, the most vulnerable economy of all.

Or even think China, whose economy remains fine, but whose rich now want to diversify their money out of China as Beijing opens its capital account and currency.

And many other troubled parts of the world, including Africa and Venezuela — a petri dish of what could happen to what I call the “third-world crisis in the first world…”

Or the end of Western-style socialism in Europe, Japan and the U.S.

I told everyone I could almost three years ago that the war and geopolitical cycles were showing a steep rise into 2020/21.

And last year, I showed you how major, proven macroeconomic cycles were also converging to make for a global economic crisis far worse than the Great Depression.

It’s all started, right on time. Either you are going to be prepared for it, or you’re not. If it’s the latter, you stand to lose a majority of your wealth. If it’s the former, not only can you protect your wealth, but you can also grow it over and over again.

Best wishes, as always …

Larry

http://www.moneyandmarkets.com

….also from Martin Armstrong:

Why Are The Markets Coiling?

The markets have been coiling, and quite frankly, this reminds me of when Pope John Paul II was shot, which was the first attempted assassination of a pope, on Wednesday, May 13, 1981, in St. Peter’s Square in Vatican City. Mehmet Ali Ağca, a Muslim, shot and wounded the Pope while he was entering the square. It did not set off a Christian-Muslim War. I remember the markets back then. This attempted assassination of the Pope followed the attempted assassination of United States President Ronald Reagan on March 30, 1981, which occurred 69 days into his presidency.

When Reagan was shot, the market sold off and made a low that day. When it was clear he was alive, the market rebounded the next day. When the Pope was shot a few weeks later, the markets went dead silent. Everyone was calling everybody, asking, “What do you think?” Nobody knew if it was a buy or a sell. The markets just went sideways. Nobody thought there would be some new Crusade with a clash between religions as we have today.

We are in the Year of Political Hell. Nobody knows what to do for the U.S. presidential elections are destabilizing public confidence. Trump is neck and neck with Hillary, although she is outspending him 10:1. Trump has more individuals donating to him while Hillary has all the bankers, hedge funds, and political manipulators who routinely buy government. She also has the press who support Hillary worldwide. The future is very much up in the air.

Then add the French and German elections next year, and the future is anything but predictable for the average person. This means investment is on hold. People are saving (hoarding cash) and deflation is continuing globally. Meanwhile, we are seeing world trade collapse. This is why the markets have been coiling. Money will not begin to really move until it figures out the direction.

…also from Martin:

World Trade Collapsing On Schedule