The Binary Circumstance

Jack Rickards, director of market intelligence for scientific consulting firm Omnis, appeared on CNBC and talked about the dollar.

Among other topics, he explains that since the creation of the Federal Reserve, what cost $.08 in 1913 now costs $1.00. He also explained why central banks hate gold and want to keep its price down (it limits their ability to print money) and how the IMF has now become an international central bank, issuing debt (printing money) for the first time. He states that the US can never pay off our debt with growth or taxes, therefore the government must allow the dollar to lose value so they can pay off the debt with cheaper money than they originally borrowed. It’s a backdoor way of cutting our debt in half.

He talks fast and covers a lot of territory, so you might have to watch it more than once, but it’s an excellent piece.

I can’t tell you where the stock market is going.

But this monthly graph shows that we are at a very important resistance level based on a trend line that goes back to 1995. At the least, I expect some healthy resistance.

If we don’t go through the resistance level, I would expect the S&P 500 to retest the 750-800 level.

(Click to enlarge.)

S&P 500 Weekly Chart from 1995

You can see the very large double top that formed and that’s not a good sign. But the market has made a nice recovery from its lows to this resistance level. What it does over the next couple of months should tell us something about what we can expect over the next few years.

Technically, it’s still in a long-term downtrend because the current high is nothing close to the previous high and the most recent bottom in September of 2008 was lower than the bottom before it and has not been tested.

Alan Turing was a hero in World War II for his code-breaking skills which helped crack Nazi Germany’s Enigma encryption machine and is also considered one of the fathers of the modern computer.

He was also gay and persecuted–perhaps tortured is a better word–by the British Government to the extent that he committed suicide. His crime was that he had sex with another man.

British Prime Minister Gordon Brown offered an apology 55 years after his death.

British Prime Minister Gordon Brown offered a posthumous apology Friday for the “inhumane” treatment of Alan Turing, the World War II codebreaker who committed suicide in 1954 after being prosecuted for homosexuality and forcibly treated with female hormones.

The mathematician helped crack Nazi Germany’s Enigma encryption machine - a turning point in the war - and is considered a father of modern computing.

In 1952, however, Turing was convicted of gross indecency for having sex with a man and offered a choice between prison and “chemical castration” - the injection of female hormones to suppress his libido. His security clearance was revoked and he was no longer allowed to work for the government.

Two years later, he killed himself at age 41 by eating an apple laced with cyanide.

The apology is pretty meaningless at this point. It does nothing to repair the misery and death caused by the British Government’s actions. It just makes those who apologize feel a little better about themselves and is therefore self-serving.

It would have been better if the Prime Minister had used this opportunity to warn against governments that interfere in relationships between consenting adults. That might do something to prevent similar events from happening in the future. But no government is going to do that since interfering in the relationships of consenting adults is what they are in the business of doing. The story of Alan Turing reminds us of the horrible cost.

In this YouTube video, Benoit Mandelbrot, the “father of fractals” along with Nassim Nicholas Taleb comments on the dangers inherent in our current financial system. They suggest it could lead to the worst crisis since the Revolutionary War.