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2.8.2017 - Financial Intelligence Report Bookmark

Possibly Our Most Important Letter

NOTE>> In a few weeks I’m going to write an article for my subscribers that very well could be the most important letter I’ve ever written.  I truly believe it is that important. I am also contemplating doing something else, something that I’ve only done once in over 22 years of writing these letters.  Back when Hurricane Sandy came through and ruined my house and the houses of a lot of my closest friends, I knew I’d be distracted a lot, and that didn’t seem fair to people.

If someone buys a subscription to my “insiders club” they expect to get content daily, that’s what we do. We do 3 updates per day, one before the open, one an hour later and one mid afternoon. In the updates we lay out what we’re buying or selling. We list our entry levels and our stops.  But knowing I would have days of no internet, no power, no...home so to speak, I put out an offer. I let anyone that was interested buy a “lifetime” membership, for just 600 bucks.  We get 199.95 per year for the Insiders Club, so it was truly a great deal. Pay the equivalent of 3 years, and get 20 if I live that long.

I figured that would be a good way of making up for any missing letters during that troubled time. Well I was astounded at how many folks took advantage of it.
I believe we are facing a time, a time so important that over the next couple years we could see changes in our society unlike anything we’ve ever witnessed. This isn’t fear porn. This isn’t drama to sell subscriptions. This is Bob speaking from the heart. If we don’t walk a very fine line over the next few years, there WILL BE wars. There will be social unrest. There will be what amounts to anarchy. Just to give you an example, have you noticed that I’m mentioned that gold and silver might have upside as we head into March?  Do you know why I think that? Because Iran has stated they will stop using the US dollar for trade in March. EVERY nation that has abandoned the dollar to go to a different currency has been destroyed. Ask Libya. Ask Iraq. 
So I’m thinking that I might just offer up the lifetime membership again. I haven’t made my mind up yet, because whether you believe it or you don’t, it’s a LOSING deal for me.  Yet I feel compelled to do something. Some of you might not even be in a position to pay 199 a year for our membership in a few years. Yet I’d still like you to have it.  So just a heads up on that. I’ll probably say yea or nea  in Sunday’s letter.  But I do suggest this... if I go ahead and do it, you’d be wise to jump on it. I’ll only keep it open for about a week or two.  I’ve been putting my trades out to people in the Insiders Club for over 22 years. I plan on doing it for 22 more. 600 bucks is the deal of a lifetime. I’ll let you know.  (ps, if you’d be one of those interested in taking advantage of a deal like that, fire me an email at editor@investyourself.comand let me know. It will help my decision making)
On Sunday I put out an article I did 4 years ago about the coming cashless society. I said that I’d do an update about what’s going on now with this push. I’m sure some of you are familiar with what’s happened in India. With virtually NO warning their President made a historic move. The following is quoted from Forbes of Asia, so you don’t think I’m making this up ...
This is a public sector innovation unthought of in history. A cultural-economic revolution in the making!" exclaimed Monishankar Prasad, a New Delhi-based author and editor, about India's demonetization initiative and subsequent drive towards developing a cashless economy.
The biggest problem with India suddenly removing 86% of its currency from circulation without having an adequate supply of new notes ready to take their place is that fact that India is more reliant on cash than almost any other country on earth. Suddenly, hundreds of millions of people were left without the means to engage economically, to buy the things they wanted and needed, and myriad businesses were left without a readily available mechanism to receive payment for their goods, to buy supplies, or pay their staff.
India’s demonetization scheme was a unilateral initiative that was planned in secret - in a back room of Prime Minister Modi’s home, in fact - by a small group of insiders tied-in with the upper echelons of India’s government. The strategy was to instantly nullify all 500 and 1,000 rupee banknotes, the most common currency denominations in the country, and then eventually replace them with newly designed, more secure 500 and 2,000 rupee notes. This endeavor instantaneously became policy when the prime minister announced it via a surprise television address at 10:15 PM on November 8.
But this surprise demonetization also did something else: it pushed millions of new users onto the country’s digital economic grid by virtual fiat. Not even the banks were notified in advance of Modi's plan, and, even with strict exchange limits that prohibited people from exchanging over $60 worth of rupees at a time, they simply didn’t have enough of the newly designed banknotes on-hand to distribute to the masses looking to redeem their canceled notes. Rather than being a 50 day transition, as the Indian government projected, it is looking as if it will take four months to a year before the country's currency supply is restored.
In point, the people of India were left in limbo as the government cancelled the bulk of their currency without providing them with the means to obtain the newly printed notes to replace it. On the surface, this seems as if it was a matter of gross negligence, but there may have been more to it than that. As the demonetization process continues, Modi’s rhetoric is less about fighting corruption and more about transitioning India to a cashless economy.
By temporarily turning off the engines which drove the cash economy, India hoped that more people could be brought into the fold by using track-able - and taxable - digital financing vehicles, like debit cards and e-wallets.
While Forbes is “fulla crap” about a lot of things, they got a couple things right in this article. Notice where I bolded the type?  That’s the real game plan here folks. They’re using the black market as the “reason” to go cashless when that’s only part of it.  The bigger part is TRACK-ABLE and TAXABLE.  It’s about total government control.  But unfortunately, there’s more. The Government knows that as you crack down on currency, more people “hoard it”. And they also know, that once you’re forced into being completely cashless, they can then apply negative interest rates on you via your bank.  The words coming out of Davos, where all the big movers and shakers meet, is that they could see 2% negative interest rates if everything was digital.
Consider that carefully folks. In the “old days” you’d deposit your paycheck into the bank. The bank would pay you interest on that money, since they’re instantly using it to go out in the markets and invest, and making loans with it.  That was cut to 0 percent. Now there’s banks charging negative interest rates. You literally pay money to keep your money in the bank. Naturally that caused a lot of folks to pull their money out and hoard it. 
Going digital means that you can’t just pull out your dollars and stash them in the mattress to avoid paying negative interest rates. On top of the payment gateways that charge a fee for each digital transaction, the “digital dollars’ you keep in your bank can and will be charged a negative rate. You’ll pay to keep those digits there.  
India is a test tube. A trial balloon. They’re going to work out the bugs on their test subjects, many of whom are poor to start with. They’ll look for the problems, they’ll look for the plusses and it will be attempted in other nations. The US is on the table. Many of the so called economic whiz kids have made mention that we should abolish the  50 and 100 dollar bill, and make the 20 the highest denomination. That way you can still buy a pack of cigarettes but you probably won’t buy a kilo of heroin with them.
This ties in with what I mentioned about ‘a most important letter” coming. Is Trump on board with this move to digital? Is Trump going to blow up Iran? Did you notice what his pick for UN was? Nikki Haley. And what did the dear gal say on day one of her UN introduction?  Let’s look...

I consider it unfortunate on the occasion of my first appearance here I must condemn the aggressive actions of Russia,” Haley said, making her first public remarks inside the Security Council since being sworn in as the United States’ representative to the United Nations last month.
“It shouldn’t happen, or be that way. We do want to better our relations with Russia. However, the dire situation in eastern Ukraine is one that demands clear and strong condemnation of Russian actions.”
“Eastern Ukraine of course is not the only part of the country suffering because of Russia’s aggressive actions. The United States continues to condemn and call for an immediate end to the Russian occupation of Crimea,” Haley said.
“Crimea is a part of Ukraine. Our Crimea related sanctions will remain in place until Russia returns control of the peninsula to Ukraine.”
Now here’s the problem folks.  This is the same BS that Obama and Hillary were spewing. So we’ve had Trump saying he wants to work with Russia and maybe get along better, and he appoints a Russia hawk who’s first day on the job is to accuse them of something they didn’t do. What’s the angle here? Is Trump going along with the war mongering Neocons, or is Haley playing the part of the bad cop, and Trump’s using her as the bad guy, while he tries to play the good guy?  No less than the issue of WORLD WAR III hinges on that answer.
Let me end this by saying this...the world is going through an upheaval the likes of which I have never seen.  This reaches up to the highest levels in the D. C. circles as entrenched establishment pushes back against anything that challenges the course the US has been on for the last 25 years.  Many think Trump is simply a good actor, but part of the same old game...sort of like the bad guy in WWE wrestling. Others think he’s sincere and is learning quickly that the rot is deeper than he ever expected, and he’s learning that the hard way. I have my own opinions about this which I’ll share as time goes on. But just know this...
Many think Trump woke up one day a year and a half back and said “hey I’ll give this President thing a shot”.  Not so fast. Do you know that he registered “Make America Great Again” just 10 days after Romney lost to Obama? This was not a flash in the pan idea he had, this has been in the works for years. There’s huge and I mean HUGE power struggles going on right now. Good guys against bad guys. Power shifts for money. People dead set for war with Iran, Russia and China...and people trying to stop it all. A banker push for a digital economy. A war between the intelligence agencies.  There’s an awful lot going on.  I truly believe the fate of the US will be determined in the next 4 years. We either go back to our roots, reindustrialize, go back to the constitution, obey the rule of law, or...we go full scale globalist with their digital currency, and one world religion/government. That’s what we’re up against.
The Market....

On Tuesday the DOW and the S&P did something amazing again. They both popped out of the gate and ran to ALL TIME NEW HIGHS. But there was a problem. Despite breaking over the old highs, with nothing  over them but blue sky and no resistance levels... they couldn’t muster the volume to pour it on. Instead by the close we’d given up  those new highs.
That was somewhat troublesome for me. As you know my theory has been that we’d make it to DOW 20 K ( we did) that we’d struggle with it a bit ( we are) and that we’d get one last high fivin’, hurray for all rally....and then it would roll over and we’d start a long protracted correction. Not a crash. Just a long slow slide lower.

Well, they had the chance for pulling people into that last hurrah rally Tuesday and it didn’t happen. The volume was mediocre at best. There wasn’t any overwhelming excitement. So does that mean it’s over? We don’t get any more “up?”  Maybe.
Today the futures suggested a soggy open. I told my Insiders group that I expected a soft open and then a dip, and  then we’d see if they were going to step in and save the day again. See folks, this market has had dozens and dozens of days where they could have just let it roll over and die. Many were the sessions we’d be down 100, 140, 170 and yet late in the day they’d rush in and save it. Often pushing us higher the next day. So it was evident that they weren’t ready to just pull the plug. Yet they can’t seem to get the volume to truly stab the breakout.
After that morning dip, the market did its recovery thing and sure enough, by the close the S&P had made it back to green by a couple points. The DOW couldn’t pull it off and ended the day down about 35.  Thus once again we have an issue where they could have pulled the plug on the market...but they didn’t. So I’m still of the mind that there’s one last big surge left.
As always you have to understand we don’t deserve to be up at DOW 20K. The following was sent to me by Trader Rob.... December 30th expectations of $30.60 for S&P Q4 earnings are missing the mark by a wider and wider margin as each company makes it's report.  With 55% of the S&P 500 reporting through last Friday, sales are missing by 0.1% overall and earnings, even with financial engineering (non-GAAP reporting, buybacks, "one-time" exceptions) are only 4.6% above last year, when the S&P was at 1,850 (24% lower) on Q1 earnings.
Or how about all these “beats” but only on “non GAAP” reporting. Take a peek at this.... HUM Q4 revenue $12.88Bn, Exp. $13.4BN, GAAP EPS ($2.68), non-GAAP $2.09, Exp. $2.06.  Do you see that? According to “ Generally Accepted Accounting Practice” HUM didn’t beat the estimates. In fact they LOST 2.68 a share. But... they’re allowed to post Non GAAP and the Street loves it.
All I’m saying is that this is NOT a 20K market. It’s gotten there by manipulation, and fuzzy math. Yes, up is indeed up and the market’s been rising on that. One day we suspect, it won’t. But until that day all we can do is continue to lean long and keep a finger near the sell button. We aren’t in any danger until the S&P fails that low close of 2238 set on the last day of December. Over that, and all the chops, pops, drops mean nothing.  Lose that and we’re in trouble.   Good luck folks. 

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