Topic: Video: The April Emergency The Fed Doesn't Want You To Know About - Mike Maloney (Read 421 times)

The negative interest rates are creating a real crisis. This was the real reason why Yellen met at the White House. We are moving toward the realization that the central banks have created an impossible situation from which there is no escape. Keeping lower interest rates because all levels of government are hopelessly in debt is wiping out the pension funds.

Germany’s Federal Finance Minister Schaeuble is now openly blaming Mario Draghi for the electoral success of the AFD in Germany, which is the Alternative for Germany (In German: Alternative für Deutschland, AfD). The AFD is a right-wing populist party that is also the Eurosceptic political party in Germany. The AFD has risen from 0% to nearly 40% in about 2 years.

Additionally, Schaeuble seems to be rumbling that the ECB is creating a huge problem with negative interest rates. If the ECB does not change its monetary policy radically and soon, Germany will be engulfed in its own major pension crisis. Central banks may be forced to raise rates to try to bail out pension funds. This has nothing to do with the economic trends.

The pension crisis is becoming a real nightmare for federal and state budgets and now depend on exceptionally low interest rates while pension funds are going bankrupt. Raising rates to help the pension funds will wipe out government budgets. This entire idea of Keynesian economics, which says that government is capable of managing the economy by raising and lowering interest rates, is a complete disaster. These people are incapable of forecasting the economy, as former Secretary of the Treasury Larry Summers openly admitted to Bloomberg TV. Those who think they are endowed with magical powers to manipulate society have created a complete mess and they are too brain-dead to realize the consequences. Our computer is extremely bearish on government. The turning point (2015.75) was the PEAK IN GOVERNMENT. Ever since that turning point, we have begun the downhill move that is destined to collapse into January 2020 (2020.05).

Keep in mind that this is the most pessimistic rally in history with the highest short-interest. This is why the market keeps pushing higher, yet slowly. It is eating through the pessimistic analysis and when rates begin to rise, there will be another wave of selling trapping the bears later in the year.

The United States of America is emerging as a top tax haven after beating Switzerland, the Cayman Islands, and Panama. You can have secrecy in the USA and states such as Delaware, Nevada, South Dakota, and Wyoming are now competing with each other to provide foreigners with the secrecy they need. However, many are now just migrating to the States. Some 3,000 millionaires from Greece; 10,000 millionaires from France; 6,000 millionaires from Italy; 2,000 millionaires from Spain, and about 2,000 millionaires from Russia have all migrated to the USA. The trend is picking up momentum as tensions between Muslims and Christians rise throughout Europe. After the revelation of the Panama Papers, in which Americans were named the least, the trend is now picking up speed.

We also warned that only a closing above the 17750 reversal would see little follow-through into the next week. Why would we say such a thing? April is a turning point and so is June, and then when we get to August we have the Republican Convention, so it does not appear that we are in a runaway trend to the upside yet. We are preparing to breakout but not quite ready for prime time.

Moreover, the weekly array also shows a choppy trend for the weeks of the 11th and 25th and volatility begins to rise in May. So once again, a clear-sailing trend does not appear to be emerging just yet.

Nevertheless, even technically, the Dow is penetrating resistance and attempting to muscle its way ahead, despite those yelling there will be a huge crash once again.

It does not appear that we are ready for complete liftoff until the first quarter of 2017. It appears that we are looking at a collapse in public confidence and that is what we need for liftoff in this shift from public to private confidence. The Panama Papers will help with time. All governments are corrupt. That is a foregone conclusion. The question remains, when will the general public reach the reality that government is not there to protect their future? Politicians only fill their own pockets and are no different than the communist leaders before 1989.

So support now lies at 17434 and 17120. Daily closings below these numbers will signal a near-term correction. Holding 17434 on a closing basis in any retest of support signals a revisit of the resistance. Only a weekly closing above 17846 will signal a retest of the major high. Do not expect a breakout until 2017.

The Dow Jones took out the Weekly Bullish but not the key one at 17846. This is why we are basing without immediate follow-through. Nonetheless, our primary technical targets for the year at 17345, 18791 and 18880. Holding the 17345 level warns that we are still move to the upside. A weekly closing above 17846 will signal a retest of the major highs and the potential to make a new high even yet. We can see that from the chart above that the technical support on the weekly level rests at the 17619 area. Holding this is warning that further upside is likely. Keep in mind that BECAUSE we made the new lows in the NASDAQ and in the S&P500 but not the Dow, demonstrates what we have been warning about that this is still a capital inflow for the USA.

From a timing perspective, we still see the key weeks ahead as 04/25 and 05/09 with volatility picking up in May and then we have a Directional Change cluster in June near the BREXIT vote. Keep in mind that may in Europe and praying Britain votes to exit for they see this as the catalyst for the demise of the EU.

The timing clearly is showing June and August as key targets for now. This is centered around the BREXIT vote in June and the Republican Convention at the end of July. Directional changes are warning of a choppy affair until the first quarter next year.

Keep in mind that this is the most pessimistic rally in history with the highest short-interest. This is why the market keeps pushing higher, yet slowly. It is eating through the pessimistic analysis and when rates begin to rise, there will be another wave a selling trapping the bears latter in the year.