The following is commentary that originally appeared at Treasure Chests for the benefit of subscribers on Monday, July 6, 2015.
It must appear sweet to be an American through the eyes of the third world - all that wealth and not an ounce of common sense - outside looking in. That's why they want in. That's why the West has immigration problems from the Mexican border to the Mediterranean - because the poor are becoming increasingly desperate. And you can't blame them, knowing what awaits them if they can make the hurdle - heaven is free money. Ironically however, and likely quite surprising to these outsiders, it's not just unfortunate foreigners who are feeling poor these days (outside looking in), the folks at home increasingly being managed out of the middle class are starting to feel the pain as well - the unemployment, the food stamps, the disenfranchisement from the American dream.
But that's what it's all about - isn't it - dreaming. What's unfortunate about this, and human nature in general, is for most, no matter how much one has, they want more, and will do almost anything to get it. It's the American way - go out and take what you want. And hopefully, you will find people stupid enough to exploit in this regard. And of course some are far more successful than others because it could be argued their moral codes leave something to be desired, not to mention they might have had a head start. (i.e. born in the right family, color, etc.) But hey, the American way is to overcome adversity - right? Try and tell that to the poor in the South, or in Baltimore for that matter. Why do you think we had the riots - because of what happens to one or two unfortunates?
Hell no. We had those riots because increasing numbers of people are really starting to hurt as the status quo's continues to turn the screws on its repressive policies. Policies not designed to help people find the American Dream and opportunity; but instead, policies designed to keep people locked out and looking in, which is repression. (i.e. think free money for the elites - bailouts, ZIRP, etc.) It's called neo-fascism, which is the cornerstone of the neo-feudal world we have returned to, where you have the ultra-rich (and their dogs), and everybody else. Barrack Obama is neo-feudal dog because he works not for the people of America, but instead for corporate America, and the tyrants that run it. For those who are oblivious to this fact, just study the terms of the TransPacific Trade Partnership (TTP), recently jammed through Congress by that pack of dogs if you need clarification about exactly what all this means, giving Obama, and Washington, dictatorial powers over the entire nation. (i.e. if you give a damn.)
So you see, the problem for 'we the people' is Washington is completely corrupt and out for themselves and their corporate masters. As you may know however, such problems are generally self-correcting, which is why the decentralization process will do nothing but accelerate from here as local politician's attempt to preserve their own power, along with radical change of course. What does radical change mean? Well, it's a funny thing, but despite the desire to remain firmly anchored in denial, when people get hungry, things eventually happen. This is what you are beginning to see in the periphery now, with Greece and Spain (weakest states) leading; but make no mistake, radical political change will be coming to America as well, even if still in slow motion.
Do you know why the Clintons and Bushes are treated like royalty in American political circles besides the fact they are moral reprobates and are easily bought off? In one word, the answer is 'nostalgia', where people quite simply associate these people with the 'good times' of the 90's (which is why GW was elected), and they will do anything to get them back, heavily steeped in denial and delusion. So, they will elect them back in looking for those times again, and they will use the fact Hillary is a woman to justify such a stupidly selfish act. What is even more ridiculous are traders and investors thinking they can go to Elysium with Warren Buffett and the boys, where becoming a millionaire is for pikers now. Here again, it's American Dream thinking right - get rich and stay that way with the means justified by the end. This is why faulty and fraudulent US markets have become ridiculously rigged. They are rigged to preserve the status quo for the Warren Buffett's of the world, not to let newbies into the club.
So make no mistake about it people - you are becoming increasingly locked out by these people, and unless something happens, the United States Of America will soon resemble the Soviet Union of old - the Stasi, the bread lines, row housing, the works - not that its so different now.
What to do?
Revolution - anarchy - civil war?
Advocating violence in a heavily militarized police state like the US is never a good idea - especially when you don't need such a plan - because the status quo is imploding on its own anyway. And then there is the likelihood most Americans would do nothing anyway, because if they are not too stupid to realize what's happening to them, they have been conditioned and / or drugged into various states of complacency and numbed zombies, where it's questionable starvation would get them to rebel. So the few that showed up would be easily dismissed by the police state. Of course I could be completely wrong about this - just look at what's happening in Greece. Is this the turning point back towards democracy? Time will tell.
In the meantime, while process takes form, the question arises, 'is there a non-violent means of fighting for your future?' (Life, liberty, etc.)
In my opinion, the answer is to turn the tables on the fascist state slowly by simply helping along natural process by 'starving the beast' - depriving it the sustenance it needs to continue its evil ways.
What do I mean by this?
Well, for one thing its not against the law to live within one's means, not borrowing (using credit) into the future, given this is a radical concept to most these days. But the thing about it is, the Creature From Jekyll Island (bankers) and corporate pigs need you to buy things on credit in order to maintain their bloated lives. So, if you stop this bad habit, a habit that could see you in the poor house one day anyway (if it hasn't already), the bad guys are disemboweled (eventually cutting off their cash flow), and would eventually go the way of the Berlin Wall - come crashing down. And while it may be impossible for you to completely live without credit, just try to reduce your intake as much as possible, because you will be better off in the end in many ways. (i.e. think life, liberty, savings, etc.)
And if you lose your job and it makes sense to declare bankruptcy, do so. Don't be embarrassed or proud, because whether or not you realize it, on a higher level you have been duped into taking on all this credit. You were talked into it but didn't know it. Send a clear message to the banksters - take your credit a shove it. I am now living within my means - not some trumped up 'American Dream'. (i.e. new car, big house, etc.)
So - starve the beast anyway you can. Reduce or stop using credit, live within your means, escape mindless materialism and consumption, and start saving in safe places like physical precious metals, which have no counter party risk and cannot be surreptitiously confiscated. Some refuse to pay taxes, but again, this is not for everybody because it has profound personal implications. You can't have a bank account, credit of any kind, nothing - so until tax revolt becomes popular, which would accelerate process, only very committed individuals should consider such a radical statement at this time because the police state can throw you in jail these days for just pointing this out.
And going to jail is no fun. But again, you can help by starving the beast and no laws are being broken. Live within your means voluntarily before some version of austerity is imposed on you, which would involve increasingly draconian methods of wealth confiscation. If this is not done, then one day, America will resemble Greece, where it may already be too late because it's so heavily indebted.
When you understand this, you will understand the economy is weakening naturally anyway, as activity continues to wind down on its own, with no help by an emerging conservatism. Again however, don't let this stop you, where living a conservative life will do nothing but benefit one in the end. Because a day of reckoning is coming at some point, don't kid yourself. Bond market liquidity is very tight right now, and a 'no' vote in Greece could make things much worse very quickly. (i.e. think bank bail-ins spreading from Greece throughout the West.) Something must be up for US banks to come in and corner commodities and precious metals derivatives markets in order to keep prices capped. Heaven knows as process continues to accelerate something nasty is due in the financial markets, where in fact it should be noted US stocks will be in position for a big crash after one more surge. (See Figure 1)
Of course some would argue stocks are already in position for a crash, where as you can see above, volatility in the S&P 500 (SPX) is at historic lows that can't last much longer. That's right, the SPX is in position to fail off the bottom of the long-term channel at some point, but this may not come until later this year and at slightly higher levels. Because as you may know, when we divide the SPX by the CBOE Volatility Index (VIX) we get an interesting picture, a sinusoidal pattern, where a surge up into the 2200 area on the cash SPX matched against the VIX below 11 would produce a completed terminal impulse. (See Figure 2)
When looking at tech stocks in measuring the health of this impulse, again, we have a picture that suggests stocks could surge one more time, with the NASDAQ / Dow Ratio failing before it reaches the 2000 highs, which is expected either way. So who knows, maybe they surge higher one more time no matter how the Greek situation turns out. And now we know. The Spartans choose democracy. The EU boys thought they were so smart, but all along the Greeks were in it for the party. The Greeks love a good party. Good for them. Maybe now we can get rid of the assholes in Brussels (and elsewhere) - no? (See Figure 3)
It's about time they find real jobs.
Before we get this though, expect a big stick save attempt to save the markets, and world - at least that will be the West World's story line. Along this line of thinking, you should know the SPX / SLV Ratio is suggesting a bit more selling before a rebound in stocks / weakness in precious metals is expected, first completing an A - B - C correction down before taking off to 167. (See previous articles on this targeting.) And we still expect to see the Dow / Gold Ratio (DGR) at 17.5 as well, with the only question will this be with stocks up one last time, or precious metals getting crushed worse than stocks.
In terms of a tell in this regard, and although it's a long way off, unfortunately we cannot forecast anything concrete here until we see the month end closes on the CBOE Volatility Index (VIX) and the S&P 500 (SPX) / CBOE Volatility Index (VIX) Ratio in turn. With Grexit now looming, along with the EU's (and West's) demise, chances are speculators will lift key broad market open interest put / call ratios in reaction (this news is bad enough to sucker them in again one more time), along with emboldening the gold bugs again undoubtedly, not that they need help in that department.
So again, as suggested above, this dip in stocks / rally in previous metals off the Greek vote is not expected to last unless the VIX closes July above 22, and the SPX / VIX Ratio finishes below Fibonacci resonance related support at 90. If we see those two metrics breached on a monthly closing basis then while anything can happen, odds would then favor the cyclical rally in stocks / sell-off in precious metals would have turned back into their secular trends - expected to last until 2020 - at a minimum. Some are pointing out the SPX has traced out Lindsey's Three Peaks and a Domed House, and they are right.
This means a great deal of selling in stocks could take place before we get our monthly signals, which will make watching the put / call ratios very important in terms of gauging probabilities. You should know that mid-July marks the end of the strongest period for stocks during the Presidential Cycle, which means if put / buyers / short seller don't show up in droves, the bureaucracy's price managers are going to have a hell of a time achieving a positive monthly close in stocks. So again, watching the put / call ratios on a daily basis is now critical, where one would be foolish to be placing any big bets until more is known.
If I had to guess in terms of outcomes, because the referendum results are not legally binding, what will happen is Greek politicians and the EU will come up with another 'moderated deal' over the next couple of days, sending stocks back up and precious metals down That's what the SPX / SLV Ratio is telling us to expect, so that's what you should expect. And the resignation of Varoufakis confirms this thinking, along with the recovery in equity futures overnight. If we see bank bail-ins in Greece as part of any settlement however, volatility could return quickly later in the week, but should be short lived as long as the status quo boys can keep everybody distracted from the math. This should be an up week for stocks if they can pull this off. So again, don't get caught in any harebrained trades here.
Past this however, and as we approach fall, it appear process will continue to accelerate on all levels, with the larger global decentralization process leading the nexus. After Greece we should begin to hear similar rumblings in Spain, Portugal, Italy, etc., as they begin to warm up to the possibility of restructurings as well. So it appears there is no winning for the status quo boys anymore, or anybody caught in the wake of their collective demise.
Couldn't happen to a nicer bunch of guys.