THIS IS THE TEXT OF AN EMAIL SENT ON JANUARY 10, 2014.

IT HAS BEEN
EDITED TO REMOVE PERSONAL IDENTIFIERS. NOTES ADDED AT END.


This is the article on economics we spoke about hes a retired geophysicist (not an engineer
although I imagine they have a fair bit in common):
http://www.independentaustralia.net/politics/politics-display/sack-the-economists,5983
I watched the short Steve Keen video, but not the longer. Keen is one of the few economists worth
listening to, although (so far; and for several years) hes been wrong on an Australian housing crash.

Speaking of housing, theres a UK-based analyst called Nadeem Walayat who proved to be very
accurate with his UK housing market forecast a year or so ago. This is his latest:
http://www.marketoracle.co.uk/Article43770.html One thing of particular interest to me was his
description of how govt debt in the UK is effectively being retired its the magic debt pudding!

If you are not already aware of plans to confiscate (call it a tax, if you like) bank deposits in the
Western world during the next banking crisis, you will find this of interest:
http://barnabyisright.com/2013/11/01/boe-says-g20-nations-to-enact-bank-deposits-within-12-
months/
In this context: http://www.elliottwaveanalytics.com/2013/12/european-banks-dumping-
subordinated-debt-on-investors/

A useful US analysis from the elliott wave analytics site linked immediately above:
http://www.elliottwaveanalytics.com/2014/01/the-real-confidence-indicator/ However, much more
than US economic fundamentals, the thing to watch out for is the flight of European capital referred
to in the subordinated debt article, as awareness of approaching confiscation [dawns]. Ironically, the
US is a safer haven for non-US citizens because US citizens whove offshored their money to avoid
US taxes will be caught in the net if they return it home.

[EDIT] has been off the mark a bit lately on the timing of some major movements, while getting
many others right. I will insert below his latest comment [NOT INCLUDED], but you might find Martin
Armstrong http://armstrongeconomics.com/armstrong_economics_blog/ more your cup of tea,
because hes more conventional although like [EDIT] a genius conventional is a relative term of
course! You can pick up info about Armstrong through a web search, but in brief: I became aware of
him in 2007 [maybe 2008] when he was in jail, after being fitted up because he refused to turn over
to the authorities the computer programme which he now has operating again. My reading of it is
that he had a personality clash with the judge, who at one stage referred to him as a legal terrorist
because he knew the law. Armstrong ended up serving several years for contempt [CONTEMPT
SENTENCES ARE OPEN-ENDED; NEVER USED AGAINST TRUE FINANCIAL CRIMINALS], with his actual
sentence then having to be served on top. The contempt aspect had become so embarrassing to the
judiciary that there was intervention to bring it to a close, thus enabling him to serve his actual
sentence. When Armstrong was released after surviving an attempt to bash him to death by a
madman hed been given as a cellmate he went back into business; he has since moved to
Switzerland because he doesnt trust US authorities. Hes worth spending some time on.

As capital seeking a haven flows to the US, where is it going to go: stocks or bonds? I reckon there
might still be some life left in US bonds, particularly at the shorter end (although maybe all along the
maturities, because Ive read and accept that for those planning to hold until maturity, a bond
portfolio can be constructed that isnt destroyed by losses on capital as yields rise you probably
know a lot more about bonds that than I do). Everything depends on individual
investment/speculation timeframes, though, doesnt it?! Anyone looking to exploit an anticipated
fall in US interest rates (rise in bonds) would then have to be on the lookout for the next phase
change, particularly keeping in mind deflation
http://www.elliottwave.com/freeupdates/archives/2014/01/06/Why-Bonds-Get-Hammered-During-
Deflation.aspx#axzz2psV8jL00 which brings us back to the situation as so ably described by the
geophysicist: if debt is money (which it is), consumer/business repayment of debt and the failure of
financial instruments destroy money, resulting in deflation.

END OF EMAIL


FOLLOW-UP EMAIL SENT LATER THE SAME DAY
Further on bonds: a possible target for rates on US 10-year notes (which incidentally are seen,
perhaps correctly, as the least manipulated area of the curve because the Fed focuses on the short
end and the long end). This chartist has been on top of his game for some time and has been correct
with some big calls.
http://www.channelsandpatterns.com/2014/01/chop-
chop.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ChannelsAndP
atterns+%28channels+and+patterns%29


NOTES ADDED OCTOBER 19, 2014:

1) Steve Keen formerly was employed at the University of Western Sydney, which found his
failure to bend his knee to economic orthodoxy too irksome and encouraged/required
his departure. He made the point in a commentary I accidentally ran across recently that
the economics teaching profession has failed to address issues arising from the 2007
crash: that is, university economics is being taught as though the crash never happened,
so no understanding of what occurred is required. He is now domiciled at Kingston on
Thames, a uni that its website describes as on the borders of London and Surrey. Good
luck to him (I easily forgive him his apparent mistake on residential real estate since
2007 because it has also been mine; on the other hand, it is quite possible the delay in a
correction/crash means the eventual drop will be that much more severe). Keens blog is
at http://www.debtdeflation.com/blogs/
2) Vince Foster at Minyanville has some very interesting analysis of bonds, if you are that
way inclined see particularly his latest three or four articles and the influence of
duration gap v leverage:
http://www.minyanville.com/library/search.htm?search=1&contrib_id=745