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5.17.2017 - Free Investing Newsletter Bookmark

Ransom, The Test
 
So, the story goes that some hacker saw in a Wikileaks email, that the NSA had created a Malware, and this hacker gleaned it and unleashed it on the world. Called Ransom-ware, the virus gets in your hard drive and encrypts all your data. It is then useless to you. Then the hacker tells you that for a price, he will send you the key to decrypt all that info and you get your computer back.

This letter isn’t a Public Service Announcement about explaining how to back up your data. It isn’t about running updates and buying good antivirus software. This letter is about realizing something very nasty about our current world. What you just saw with this virus hitting 150 countries and 200K computers, was just a trial run. A warning. A shot across the bow.
 
First off, let’s consider a few things. In China, ATM’s went dark. Remember all those supposedly paranoid articles I wrote, saying that “What if one day you woke up and the grid was down? No power, no ATM’s, no groceries, etc?”  Remember? Well, in a trial run, a lot of people just saw what can happen. Consider this... you have money at the XYZ bank. Or do you? No, what you have is a slip of paper, or an electronic read out that says you have an account with “X” amount of money in it. If the BANKS systems go down, you’re not getting anything. Nothing. Not a penny.  Ask the Chinese that day. Thousands couldn’t get a single “Yuan” out of their bank.
 
In Britain, hospitals went down. Surgeries postponed. Clinic’s closed. It is believed some PEOPLE DIED.  All because (supposedly) some shaggy hacker let loose this ransom ware. But there was something telling about this, and you can say I’m being a conspiracy nut...that’s fine. Just ponder it.....  first off it attacked Windows XP. That’s an old operating system that MSFT ended true support of. So it wasn’t as if this attack was on the newest or most widely used equipment.
 
But secondly, they demanded payment in “bitcoin”.  Why bitcoin? Well it’s widely known to be pretty anonymous. Without some really high end forensic technology sleuthing, you can’t find out who’s sending or receiving payments. Do you think the CIA, FBI, DHS, DNI, and the other 15 intelligence agencies, along with our friends at the IRS, and of course the Federal reserve and Central bankers...do you think they like the idea of someone being able to be paid without them able to trace you?? 
 
So , what if this attack on outdated software, demanding bitcoin wasn’t just some 14 year old kid’s idea? What if the “big players” allowed it to happen ( especially the speed at which it replicated) for a purpose?  I find it way too coincidental that following an amazingly blistering run, where bitcoin went from 1400 to 1700 dollars in under a week, a ransomware attack goes out, WORLD WIDE, demanding bitcoin for payment. 
 
Do you suppose that a narrative will come forth suggesting that Bitcoin has to be reined in, because the “bad guys” can use it for nefarious deeds like drugs, hookers, murders and ransom ware?  Bet on it. In fact, a “test run” like we just saw kills a lot of birds with one stone. First  they can use it to attack bitcoin. Again, notice how this went global. Just like bitcoin is global. Second, by infecting older software, they can force companies to go buy a ton of newer computers and software programs.
 
Now, here’s the real issue. Whether you like him or hate him, Snowden “told” us a lot of stuff. Even the movie,  “Snowden” which is of course “amped up” to be exciting, lays out some truths that either the American population missed, or is too dumbed down to think about. In the movie there’s a part about how they had inserted “kill switches” in virtually all the hardware and software around the world. The idea being that if a country decided not to be our ally, or went rogue or what have you, with the flip of a switch at the NSA, that country goes dark.
 
That’s dams, trains, airports, cell towers, power stations, electrical grids, banks, everything. Now you can’t call that a conspiracy, because we just saw how the NSA had created a “back door” into Windows XP that could be exploited. Well guess what? That’s amateur stuff.  In the last 8 years, virtually everything that comes out of the factory has someone’s kill switch already built in. Hidden malware in software. Remember the furor over the TV’s that were spying on people and sending info back to Samsung and vizeo? LOL, well if a stupid TV can come out of the factory with microphones and camera’s in them and send info back to the manufacturer...don’t be silly enough to think that every router, every splitter, every control box, every Windows 10, every...everything, is already got a bug in it.
 
The question is...who’s in control of the bug? The NSA? Sure. But are they the ONLY ones? What about say... the Mossad? Maybe they’ve got some control bugs planted? Or how about the UK’s MI5? Think their intelligence could have some kill switch/malware hidden in devices around the world? I think you’d be childish not to.
 
Folks, we all think of war as bombs and tanks and fast planes that give Pentagon geeks all forms of war porn. But war doesn’t have to be waged with bombs. Cyber war can kill just as well as bombs, and doesn’t take out the infrastructure. Viruses, Phishing scams in Email’s, etc, are just the low rung of the ladder. Embedded kill switches in every Window’s computer? Now you’re talking big trouble.
 
Ya know how you’ll be sitting there and all of a sudden you get the dreaded “Microsoft needs to update, don’t turn off your computer?”  They just hit out of the blue. Well imagine the MILLIONS of windows computers out there and if one day they all said “Microsoft has been told to disable Windows.”   And it went dark. For good. How do you think things would look around your town? Not so hot.
 
I’m beyond trying to scare you all. This isn’t science fiction, it’s real. The developments at the military departments pertaining to artificial intelligence is growing exponentially. The Internet can at the very same time be the 8th wonder of the world, and the most dangerous thing we’ve ever created.  Watch Snowden the movie. There’s a lot of truth that they let go in that movie, more than I’d have imagined they’d allow.   
 
The Market....
 
Monday, for no really good reason, the market jumped out of the gate, wiggled a bit and then ended the day at another all time closing high for the S&P.  Tuesday, they couldn’t hold it, but at the end of the session we were just off the mark by 2 points.
 
But today? Today for what ever reason, they decided to really put in a pout. The word on the TV networks of course is that Trump should be impeached for supposedly asking Comey to end his investigation of Flynn.
 
The futures were really lousy this morning. I hadn’t seen DOW futures down 100+ in months. Everyone wondered if like so many other days, we’d dip at the open, they’d rush in, and by 11 we’d be back to flat again. Well they didn’t have to wonder long. We opened red, attempted a small bounce and then puked.
 
In the first hour of trading we fell 245 DOW points and more than 20 on the S&P. After that, they did manage a couple feeble bounces, but even as late in the day as 2 pm, we were down 284 DOW points and 32 on the S&P.  By 3 we were down 344 and 40. It was a genuine sell off.  Many thought that in the last 45 minutes they might come flooding in, with a wave of short covering. Nope. We ended the day down 372 DOW points and a whopping 43 on the S&P.
 
So today was all about....just what exactly? For months we’ve had North Korea, Syria, falling auto sales, fading GDP, and a hundred other things and we hit all time highs. Now, because the rabid democrats and the media are going full tilt nuts because supposedly Comey wrote a note ( that he sat on for months, until he get fired) saying Trump asked him to pardon Flynn?  Was that the reason, or the excuse??
 
If it truly was the “reason” then we’ve got more downside to come. This story has huge legs now, with requests for Impeachment, requests for Comey to testify, Congress asking for ALL Comey “memo’s” throughout all of Trump, Obama’s and Clinton’s terms....etc. This isn’t going to end tomorrow, or Friday or...next week.
 
So now things really get interesting. After months of this market moving up on low volume, ignoring everything in its path...we get a pretty big smackdown. I had said on Sunday that the technicals were breaking down. Well now they’re in the crapper. The IWM, S&P, XLF and DOW are all below their 50 day moving averages.  If the hidden hand of the Central bankers doesn’t swoop in here soon, we are headed lower.

Oh and please folks...for you hold outs that still roll your eyes when I mention that the only reason we’re up where we are, is because of Central bank buying...I swiped this from Zero Hedge today. It’s a note out of Bank of America...
 
Courtesy of Bank of America which in the latest overnight note from Michael Hartnett notes that central banks (ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, “the largest CB buying on record.”
 
Well that’s just part of it friends. See, from 2011 - 2016 the Central banks bought 7 trillion in financial assets. So it does seem a panic that it took them 5 years to buy 7 trillion worth, and only ONE QUARTER to buy another trillion. But they’re only talking about the BOJ and ECB. What about the Swiss? What about OUR own Fed? 

Yeah I know, they say they don’t buy stocks. Right. Remember during the melt down, when we found  out through a Freedom of Info act, that they had sent 16 billion dollars to Europe?? Money they never told us about?  And you think just because they say they’re not buying stock, they aren’t buying it via hidden accounts and their friends at Citadel?  Please.

The technicals suggest lower is coming. It’s up to the banks to see if they let that happen or not. It’s really pretty much that easy. I just don’t happen to have a hotline to their headquarters to ask them what it’s going to be.
 
One day does not a trend make. Just two days ago we set an all time closing high on the S&P and yesterday we missed that by 2 measly points. So this “blip” we just had today, could be erased in a day or two. But from where I sit, way up in the cheap seats...it feels like lower is on the way. Plan accordingly. 

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